hello agoracom,

would you be kind enough to see that noront mgmt receives this, with much decision making regarding noront under certain instances noront could end up finding some of the greatest mines in history and its shareholders NOT benefiting much from the find, this is easily remedied according to jim sinclairs insights below.

i can not take credit for the writing below, it is from jim sinclair. jim is one of the foremost experts on mining, gold, and finance. mr sinclair was on the short list for the u.s. treasurer back around the reagan era as i recall. in the big gold move in the 78 - 80 bull mkt he was known as the single largest trader of gold in the world and sold out within days of the top and told all who would listen (in forbes i think) that the move was over for a long time. he has brought numerous mines to fruition including sutton resouces, he has made many hundreds of millions for his followers. also he is the son of bert seligman, an asscoiate of jesse livermore, and bert was one of the more astute traders of his era as well as heir to the seligman banking dynasty (one of the largest 20th century investment banking families) etc etc. in other words jim sinclair is the real deal. in his older age he is focusing on sharing knowledge, and doing a great job i might ad.

any way here is jim sinclairs insight (extremely lengthy and detailed but when you are talking about hundreds of millions of dollars, it is worth the read for management:

> General Editorial Posted On: Wednesday, August 29, 2007, 4:02:00 PM EST Derivatives Risk Not The Only Problem Many Companies Face Author: Jim Sinclair To escape the derivative risk those involved should consider shifting their percentage agreements to royalty agreements or reduce their percentages with the following clause or a derivation of what is below. The problem these companies face is not just a derivative risk, but the implications of that in light of SEC Rule 10b-5. Hedging and Related Trading: All profits and losses resulting from the Payor engaging in any commodity futures trading, option trading, metals trading, gold loans or any combination thereof, and any other hedging transactions with respect to Mineral Products (collectively, “Hedging Transactions”) are specifically excluded from calculations of the Royalty pursuant to this Royalty Agreement, it being understood by the parties that both the Payor and Payee may engage in speculative hedging trading activities for their own account. All Hedging Transactions by the Payor and all profits or losses associated therewith, if any, shall be solely for the Payor’s account, irrespective of whether or not Mineral Products are delivered in fulfilment of such obligations. When necessary to give effect to the provisions of this section 8, Gross Revenue from Mineral Products subject to Hedging Transactions by the Payor shall be determined by reference to the Fair Market Value of such Mineral Products. ___________

and this was a follow up by jim sinclair to questions someone had on his first note about what occurs in joint venture agreements:

The junior must subordinate its share of the project to the development loan, and therefore has all the benefit and all the responsibilities of that loan.

The juniors do not own ounces, they own a percentage of a venture. This is why it is called a Joint Venture. A Royalty company like RGLD does in fact own ounces practically free of charge. Junior JVs do not work in this manner.

Yes, of course, a junior has their own agreement with the major, but you demonstrate the industry thick headiness to assume a loan you have signed on and subordinated your property to does not obligate you in the same way as a major. You assume the major takes all the risk and acts in a philanthropic manner with the junior.

Your accounting knowledge also needs some improvement. It is therein that the death of the junior exploration and development lies by not accepting the fact that this junior industry is obligated to the development loan according to their percentage of the JV property.

Review SAS 133 and SAS 138 to track how the derivative required for that non-recourse loan produces benefits or damages which MUST be charged to the project and therefore to the junior according to their percentage of the JV. Once again you are assuming by looking at one document only that the major is a philanthropic entity that will take all the risk of the indenture of the development loan and its embedded derivative requirement on behalf of the junior. This is just plain wrong.

Junior exploration and development companies and their leadership, if they really believe what you said, are afraid to do their own investigation fearing the truth. In this mind set they run in danger of a major 10 b 5 violation.

Would you dare to say that with that major company publicly binding themselves to deliver gold at $325 for years into the future on a 30%/70% JV would deliver 70% of the gold at $325 and 30% of the gold at market? That is complete madness and a total lack of legal and accounting standards.

They have two contracts, one with the major and then they have to sign the loan agreement and subordinate their property interest, thereby now having two contracts. How many juniors have even read the development loan documents of which they are solidly part of?. Few, I believe.

Sadly, you reflect the general thinking which ignored my pleas not to hedge with long OTC derivatives since 1999. Newmont never needed to lose 2,000 million dollars. They got that present, I believe, when they acquired Australian companies up to their eyeballs in exotic long OTC derivative hedges. It "can't hurt me" they all thought just like you feel regarding juniors in JV agreements. Well your "it can't hurt the junior" is sad and totally baseless. Investigate this more thoroughly for yourself, for your sake.

Respectfully,
Jim

jim can be read daily free of charge at jsmineset.com

http://www.jsmineset.com/

i have read jim sinclairs works for 3 years, he is a great source of knowledge and sharing (just like this agoracom site).

regards,

jsq