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JOHN: Well, you know there is always the complaint that the juniors aren't doing well and we even get emails and Q-line calls about what gives, but I think you believe that this is really going to change really shortly here.

JIM: I mean we have the FSO Junior Mining Index and if you take a look at the junior mining index, it's been within a narrow channel and it’s been consolidating since the beginning of last year. Every time it hits the lower end of its channel, it holds and that's what you're seeing in the junior area. This week we had a gold rally one day, it was explosive. It's very important that they knock it down because you've got more rate cuts coming. But you know, the juniors are within a narrow range, you're seeing them trade that narrow range and I don't care if you look at the producer index which is in a channel, you take a look at our development companies are breaking out and also some of the exploration companies are held within narrow channels. So even if you're just looking at charts –forget the fundamentals that we've been talking about here and just look at our FSO junior mining index it's telling the story that there is a break out coming. And lo and behold, Katie bar the doors when this break out comes, it's going to be big. [17:56]

JOHN: Yeah. But Jim, look on the day that we're talking right now, gold got hit pretty hard. Let's face it, they are hammering it down and that doesn't really bother you; right?

JIM: Oh, goodness no. In fact, I've been shopping all week long buying shares of my favorite juniors and I'm going to continue doing that. I'm like a kid in a candy shop. I love it when things like this happen, John, because I don't pretend to be a technician. I know how to read charts but that's not my expertise. I just know that all of the stars are lined up, the fundamentals are there, and when you see people like Pierre Lassonde putting together a merger, or you see a Sean Boyd say that “we're going to make 1.6 billion in acquisitions,” there are a lot of smart people in the mining industry and they see this very same thing. And if you have people like Lassonde doing this or Ian Telfer you can bet there are going to be other people doing the same thing. So I think we're on the cusp of this, so I hope they keep doing this because like I said, I've been on a shopping free an I'm going to be shopping and continue to shop buying more of what I like. [19:01]

JOHN: Why don’t you open up a store and call it Gold Mart or Wall Gold. How’s that? Or Junior Mart. There you are. Well, it's no secret that you love juniors, I guess we've swallowed that one so far, but if you were to tell people who were interested in this, any helps on how to buy these, what to look for?

JIM: You know, don't buy the juniors on days that they take off or there is a major gold rally because you're chasing it. Find a junior that you believe in, research the story, go to the website, talk to the company CEOs and try to find one that has the characteristics that we're talking about in a mining-friendly jurisdiction, on the way to 2 million ounces, three million ounces, all of the characteristics that we talk that make juniors attractive. So pick out on your shopping list -- you know, that's what I do. We have juniors that we have that we like that meet that criteria. There could be a selloff.

I also like companies where there is liquidity coming in because there is a lot of short selling that has been occurring in the junior space, and you know, the best thing to do is to use that to your advantage. So when you see that they are increasing a short position, they are trying to drive the price down, let them bring the price down to you. And as they bring the price down –and especially on days that there is selloff – that's were you want to go in and make your bids. The last thing that you want to do is go chasing something because, you know, some newsletter writer or analyst has written a recommendation and all of a sudden everybody is jumping on bore the stock driving it up. I like to do my buying when there has been big selloffs. There is big problems that are occurring. People are panicking, jumping out windows or short sellers are coming in because short sellers are creating a lot of liquidity because they are trying to drive the price down.

What you do is, I'm going to just use a simple example. Let's take that you found a stock say, it's a dollar a share, you're seeing that the gold market corrects, the shares drop to 90 cents and all of a sudden, the price of the shares are going lower during the day. Then you know what you do, you go in and drop your bid, so maybe you're going to buy 10,000 shares, put in a bid for 2500, pick up shares, if they drive the price lower, lower your bid. In other words, make the sellers come to you. Use the selling action to your advantage. What happens unfortunately is most people end up chasing gold stocks. They go in, they buy it when it's ramping up on a day instead of buying it when things are going down. So on a day like Friday, I was in buying on Friday, I was buying earlier in the week; and especially one of the stocks I love, the stock went through a major correction, they took the price of the stock down 20, 25% and I just kept lowering my bids, lowering my bids and just picked up shares. So you can use these opportunities to buy shares at a lower price. But once again, using the marketplace to your advantage rather than chasing things, watch for the price to drop. So on days like we've had on Friday where you had the HUI selloff, it was down 3%, the XAU is down. You know, some of my favorite juniors were down 5 and 6%; I was in there buying. That's the way you want to buy these stocks. But with the caveat, John, number one you've done your homework, you know what it is that you're buying, so you believe in it so you're not going to get shaken out if something happens. You know, you have a selloff in the gold market, you're jumping out window. And so instead of selling your shares, you add to your positions and you build those positions during the downdrafts.

I hate it when the markets really take off and prices go up because once again, you know, I think we're in the early phases of a bull market and the only thing I'm interested in is how many shares will I own when this gold market peaks out. And more shares that I can accumulate, the better off I'm going to be and the more shares I can accumulate, I do that when things are correcting, not when they are going up. [23:07]

JOHN: So I can assume that on a day like today, and we're doing this on Friday, which we always do, gold is down $27, the junior sector is down, but I would guess you've probably been in there buying today.

JIM: Buying all day long, John, and I don't know how many times that I can pound the table, but it's my opinion this is going to be the last call, the last time that you're going to have this opportunity to buy juniors at an incredibly depressed price because whenever things get depressed so depressed nobody likes them, they are shorting them, they are selling them, we know what eventually happens, the bargain hunters, the smart money goes in, they buy stuff when it's cheap, when it’s being thrown away, given away. What's the old adage in the market, “buy low, sell high.”

And I believe that as bull markets develop, they begin with pessimism, they move to skepticism –which is where we are now – then they move to optimism and they end in euphoria. And we're in the skepticism phase. And as we move out of this skepticism phase, we will next move into the optimism phase and I can tell you then during the optimism phase, you're not going to be able to buy gold in the ground at 30 bucks an ounce, $40 an ounce or $50 an ounce. The most discouraging thing that I see is whenever gold, remember, John, a month back or six weeks back when gold was over 1000, our phones were ringing off the hook. When things become cheaper, people do just the opposite. They don't want to buy, they want to sell. And I can tell you, we are moving in this next phase of this bull market. We're going to be moving from the skepticism –nobody believes it just like in the oil phase – and we're going to be moving to optimism as the price of bullion heads higher as you see more mergers like the Metallica merger put together by Pierre Lassonde. As more of these deals unfold, it's going to change the whole psychology. And you and I know, as long as we've been doing this show how quickly public sentiment and psychology can change from one of negativity and jumping out the window to one of euphoria. We're a long ways off from the euphoria stage, but I do believe we're going to be gradually moving here from skepticism to optimism. [25:33]