Here is Mike Hoy is saying (07/27/09)

Clint.

================================================= ROCHER DEBOULE RDBHF (AM), RD (CAN) $.10/SHARE:

Rocher Deboule happens to be my favorite stock and my largest position.

I feel RD is uniquely positioned to take advantage of the market that they are in.


THE STEEL INDUSTRY, GOVERNMENT INFRASTURCTURE PROGRAMS AND RD:



THE ART OF CREATING MONEY OUT OF THIN AIR!

Over the next decade I believe politicians will adopt two massive spending strategies in an attempt to bring the US out of the financial problems it has today. The first project will be to make the US dependent upon its own natural resources to supply all its energy needs for the future. The second project will deal with the replacement of obsolete US infrastructure in conjunction with the building of new infrastructure.

Both projects are long overdue and when successfully implemented will go a long way towards putting people back to work. Spending the money in this manner will give those who will be stuck with attempting to pay the bill something to show for their effort when all is said and done.

I also believe foreigners who are and have been the recipients of these over-valued dollars have no choice but to unload them before the dollar is recognized for what it really is; worthless paper! Much of this money will find its way into gold and silver to safely protect the future buying power of the reserves they need going forward.

Foreigners know they can only swap a limited amount of their reserves into the precious metals as the available quantities of precious metals will not support the demand. Any deemed excess dollar reserves must be liquidated. I believe the holders of this paper will have no choice but to spend this paper before the value of their reserves collapse. One way of spending these reserves would be the development of infrastructure programs within their own countries.

As the race is on to liquidate and spend this paper in conjunction with the development of infrastructure programs both in the US and overseas; this renewed demand for resources will create an artificial revival in many distressed sectors that could last for years. We all know funds are being created to spur growth and employment at a time the country needs it the most. The only answers we don’t have at this time are the total amount of funds which will find their way into these sectors and the time it will take for them to trickle down the political and corporate ladders. In the end infrastructure programs will be developed and replaced worldwide building demand pressure on the world’s dwindling supply of natural resources.

I think each of you can see the direction in which I am headed. I believe the demand for base metals will stay strong in developing countries such as China and India while the downturn in demand will eventually bottom out and then slowly begin to increase in developed countries like the US as these new programs and projects begin to receive funding from the newly created trillions in worldwide debt.


Under this scenario, I believe there is a strong possibility that a shortage of certain base metals is inevitable and I think it could happen sooner rather than later. One base metal of particular interest to me is MANGANESE (Mn).


US STEEL PRODUCTION;

Worldwide production of steel in 2008 was 1,329 million metric tons down 1.2% from the year 2007. The US production of steel in 2008 was 91 mmtons down 6.8% from 2007 levels. The US produced 6.85% of the world’s total steel production in 2008. China produced 502 mmtons which was an increase of 2.6% from the prior year and 38% of the world’s total steel production in 2008.

The lack of capital has carried over into 2009 crunching these numbers substantially further. Make no mistake of the fact that the steel industry has slowed down dramatically as a result of the world’s financial chaos. I doubt the worst is behind us yet as funding for projects has yet to trickle down to stimulate new growth. Once funding begins to surface a bottoming process will begin.

The funny thing about this picture lies in the fact that we are simultaneously seeing the disappearance of base metal stockpiles. Do you think the possibility exists that countries like China are taking full advantage of the opportunities to load up on inventories of base metals at these depressed prices knowing that demand will increase in the future? I do!

I say this because of the rebound we have seen in the price of selective base metals from their November 2008 lows; copper is recognized as the frontrunner in the sector. Copper prices have rebounded from their Nov.2008 lows of roughly $1.30/lb to $2.20/lb.

As I discussed above, I believe the money and programs being created now will dramatically change the demand for base metals in the future. Smart money also recognizes this and as a result capital is beginning to step up to the plate to take advantage of projects which merit their attention now.

The financial mistakes of the past have created phenomenal opportunities for the future at “dirt cheap” market prices today. This is why we are seeing billions in “bought financing deals!”

True wealth understands the complexities of being diversified. This wealth also understands that investments once considered safe are now questionable at best. As a result, direct investments into mining operations are becoming very attractive to those who want to own something of merit in the event the financial system is challenged again.

MANGANESE (Mn);

In January 1987, Manganese was certified by the US Department of State as a strategic mineral essential for the economy and the defense of the United States in that it is unavailable in adequate quantities from reliable and secure domestic sources. To make matters worse is the fact that there exists no satisfactory substitute for manganese among its major applications. In fact, manganese is now being used as a substitute for certain alloy applications due to new and innovative metallurgical discoveries.

Iron is the number 1 component in steel with manganese being the number 2. Every ton of steel contains roughly 10-20lbs of manganese. There are vast resources of iron ore in the US and Canada. The absolute irony to this lies in the fact that there is currently no manganese production in the US or Canada. That’s right folks; the US is currently 100% dependent on foreign countries to supply our manganese supply. Much of the supply of manganese comes from countries with virtually no loyalties to the US.

With the US steel production totally dependent upon foreign sources of manganese and absolutely zero US Government stockpiles of reserves one has to ask themselves whether there is a risk that one day the supply of manganese to the US will be disrupted bringing our steel industry to a standstill?

I think there is a very strong possibility of this and I believe Rocher Deboule (RD) is positioned to take full advantage of the opportunities that lie ahead.


Manganese prices fell from a high of roughly $2.25/lb to a low of $1.05 in Nov 2008. Since then prices have rebounded to roughly $1.50/lb. Current prices range from $1.10-$1.25/lb.

ROCHER DEBOULE (RD) Can. (RDBHF) AM.

At one time there was a small amount of manganese production in the US; parts of this production came from:

The Huffman Property at Artillery Peak in Arizona from 1953-1955. Production consisted of 51,000 tons of concentrate grading 29% manganese from an open pit.

The Lake Property at Artillery Peak where production was 33,126 tons in 1953-1954 grading 18.8% and shipped to the Government Depot at Wenda Arizona when MN was priced at $.045/lb.

The US Bureau of Mines diamond drilled 66 holes from 1937-1949. This drilling resulted in a historical resource of roughly 80,000,000 tons grading anywhere from 4.73%-5.45% which translates into 7.5 billion lbs of mn.

For the first time ever all these different projects and properties at Artillery Peak have been brought together under one roof; that’s right Rocher Deboule.

April 29, 2009 Rocher Deboule released a 43-101 report showing

Artillery Peak Manganese NI 43-101 Resource:

Indicated: 10,865,929 Tonnes @ 4.46% Mn = 1,068,307,976 lbs.
Inferred: 96,933,724 Tonnes @ 4.52% Mn = 9,661,091,721 lbs.
Total: 10,729,399,697 lbs.

With Mn prices currently between $1.10-$1.25/lb. you do the math as to what this body of ore is worth both in total and per tonne.

Not only is RD looking at open pit mining but ongoing metallurgical tests show that the ore can be leached rather than milled with better than a 90% recovery. If future metallurgical tests continue to confirm these results this is excellent news as this will reduce CAPEX and operating costs to a fraction because the ore does not need to be crushed or ground.

Mn is visible at surface across much of the property. Artillery Peak is recognized by the US Government as the largest low grade body of Mn in the US encompassing an area of 12 sq miles. Future drill programs can only increase current totals.

I think it is fairly obvious that very large quantities of Mn exist at Artillery Peak. I think it is also fair to assume that there are pockets of much higher grades than what is currently being reported at this point in time.

Incidentally, no one I have spoken with or any research done has turned up any high grade manganese deposits in the US or Canada.

I believe it is only a matter of time before “Murphy” appears and the vital Mn supply to the US is threatened. Anyone who understands the risk of what a supply disruption of Mn would do to the US steel industry also has to understand the potential reward to shareholders who own stock in a company working to bring a domestic supply of Mn online.

The only way to protect the US steel industry in meeting the needs of the US Mn demand is to develop a supply of Mn within the US borders.

RD is moving the Artillery Peak project forward and if all goes as planned production from Artillery Peak could commence at a time when demand is once again beginning to outpace supply making purchases today very timely for profits in the future.

RD is in the process of completing an economic study which will outline their plans going forward. Infill drilling to prove up additional quantities of ore as well as higher grades, continued metallurgical studies and a feasibility report are all in the works or on the drawing board.



Anyone with any additional questions can reach me at the number below. Anyone who would like to be removed from my e-mail list can do so by clicking on my e-mail address and asking to be removed.

As always, these are my own thoughts and it is your responsibility to do your own due diligence as in the end your opinion may vary from mine. We own roughly 1,500,000 shares of both GOR and 3,000,000 RD. I am compensated as a consultant with both companies.

402-483-4484 8:00 AM-8:00 PM CST

[email protected]

Mike