The more I dig, the more I like Diagnos Inc. Here's today's reasons;

So we know that Sage has been a client of Diagnos for a while (see http://www.agoracom.com/ir/sagegold/... ) and we know that Diagnos is involved with several junior exploration companies and some majors (see http://www.agoracom.com/ir/MacDonald... ). They say they have a piece of software doing Artificial Intelligence data mining in large database spaces, pretty cool stuff! I'm a software architect (or engineer if you want) and I've created Expert Systems for large corporations and have a passion for AI. Maybe that's why I'm a bit biased... So let's look at hard facts.

What's the track record of this company with their software? Is there a company that has struck it big using their software?

After doing some digging in Diagnos' news archive, I find a press release dated May-15/05 stating that Mana Mineral SA (a subsidiary of Semafo) will use their software to discover gold on their Burkina Faso properties in West Africa (see http://www.diagnos.ca/english/pdf/Ne... ).

So did they find gold??? You bet 'ya they did! That junior exploration subsidiary of Semafo is going into production this month with an anticipated yearly yield of 125,000 ounces. See http://www.semafo.com/operations_bur... for more details. At $850/ounce that's $106,250,000 in gold production.

Now if Diagnos has the same arrangement with Semafo as they do with Sage (it's not indicated in the Semafo press release), where they get 2% Net Smelter Returns (NSR) on their find, that's $2,125,000 a year in royalties for Diagnos. With the mine having an 8 year life expectancy, that's an easy $17 million for Diagnos. Did I mention that their stock closed at $0.70 today???

Ok, so I'm pumped with this... Who owns Diagnos Inc.?

More digging and I see some insider trading by Anglo Pacific Group PLC. 900,000 more share on Feb-12/08 (see http://www.canadianinsider.com/coRep... ). Turns out that Anglo Pacific Group PLC (http://www.anglopacificgroup.com/s/H... ) is like an investment company that "...generates returns for shareholders by receiving royalties from mines..." and "concentrates its activities in Australia, Canada and the USA". So the next question is; 'How much do they own of Diagnos' shares?'. Well, I had to pay $20 to get this info, but they now own 6,295,500 shares and 350,000 warrants. That's 16% of Diagnos!

But wait! That's not all! (Here's the Kinsu knife part...)

They also own 6,957,500 shares and 5,000,000 warrants of Sage Gold. That's almost 10% of Sage! Talk about doing a full 360 degrees on this one!

So why did Anglo Pacific Group PLC buy another 900,000 shares of Diagnos Inc. anyway? More digging... (Wish I didn't have a full time job getting in the way of doing stock research all day).

Colt Resources Inc. (COLT:CNQ) has "...entered into a Formal Options Agreement with Diagnos..." and "... exercised its option to acquire 100% undivided interest in the (Uranium) properties, subject to a 2% NSR Royalty payable to Diagnos...". This press release is dated February 12th, the same day Anglo Pacific Group buys another 900K in the public market. (see http://www.cnq.ca/Storage/1135/10122... ) for more.

Coincidence? I don't think so. Remember that Anglo Pacific Group creates value for their shareholders by aquiring mineral royalties. All of Diagnos' deals involve a 2% NSR royalty.

HuntMountain Resources (HNTM:OTCBB) saw their stock raise 56% yesterday after they released news that "La Josefina Drilling Hits 19.9 g/t Gold and 2100 g/t Silver" (see http://www.huntmountain.com/news/08/... ). Guess what... Another Diagnos technology user.

Did I already mention that Diagnos' stock closed at $0.70 today?

The more I dig into this company, the more I like what I see... By what I can tell so far, they have about 20 clients using their software. If 1/5 of them move into mineral production that would represent, I estimate, around $100 million a year in royalties (based on Semafo's gold production and yearly yield).

I don't know about you, but I'm convinced at this point that they have something really cool that's going to pay off in the long run. Do your own DD on this and share your own findings, or refute mine. I'd love to hear other people's thoughts on this.

Thanks.