This is an except from The Gold Report interview with Warren Irwin. I picked out some stuff of interest.:

Busy drills, promising deposits provide the best price protection

Whether it's precious or base metals in the ground, Rosseau Asset Management founder Warren Irwin likes to see extensive, aggressive drill programs in promising deposits. In this exclusive interview with The Gold Report, he says that investments in such companies have paid off in the past and are likely to do so in the future. Gold or silver, copper or nickel, even if commodity prices fall, he argues that the miners with the higher-grade deposits and busy drills have—and offer—the best price protection.

The Gold Report: Opinions go both ways—whether people should be buying or selling gold, for instance. Copper is picking up and going strong, so some folks say it's time to get back into base metals. Would you share your overview of the precious and base metals markets today? Where do you see the opportunities?

Warren Irwin: I've been investing in these sectors for years and one thing I try to avoid is a view on the commodity itself. I try to invest in the companies within a sector that have tremendous upside potential, whether the commodity goes up or not. If the commodity declines in value, extensive drill programs will help offset that decline. This approach has worked really well for us.

A couple of interesting things are going on with respect to both base metals and gold. Central banks have informal agreements to keep a lid on the gold price because its rapid appreciation would undermine the strength of the fiat currency system. Longer term, despite that downward pressure, there seems to be demand on the buy side and gold's fundamentals are pretty good. In the meantime, we just try to pick the best among miners that are finding gold every day as they sink drills into their properties.

On base metals, copper in particular has had a reasonable run the last little while. Much of that is due to countries like China stepping up to the plate and investing money in copper they'd otherwise invest in U.S. dollars. I'm sure the amount of copper the Chinese are buying is well in excess of their demand, but over the longer term they believe it's a good place to keep their money. That's been very bullish for copper.

TGR: Are you thinking of near-term producers or more of drill plays?

WI: I'm a real fan of drill plays. I'm not a fan of near-term producers because, as I suggested, we've really benefited when we've been able to buy into a company with maybe a half a million ounces that's on its way to one to two million ounces. That way, if the price of gold stays where it is, that's great. If it goes up, that's better. But if the price drops from, let's say, $875 an ounce down to $700, the fact that this company is drilling out resources from half a million to one to two million—that increase in resources will offset a substantial amount of the decline in the gold price. For that reason, we generally stay with higher-grade deposits because they offer the best price protection.

TGR: When you say "long term," what's your timeline?

WI: I think it's just a matter of time before the printing of U.S. dollars has a massive inflationary impact on the world. And I think gold will be a very strong performer once people figure that out. People will tire of earning virtually nothing in their money market accounts. As they gradually start seeing the impact from the U.S. government printing a substantial amount of dollars, they will realize they are losing purchasing power. At that stage, they will see gold as one of the better-performing investments.