Mr. Cunningham brings over thirty years of experience from diversified mineral exploration and mining geology through to executive management. Eighteen of these years have been focused in Nevada. Recently, Mr. Cunningham has been Vice President of Nevada North Resources (U.S.A.) Inc. where he acquired eight new properties and successfully negotiated leases with major mining companies including Newmont, Placer Dome, Newcrest and Barrick. Previously, he has been Exploration Manager with Uranerz U.S.A. Inc. During his tenure with Uranerz Mr. Cunningham led the exploration and acquisition effort that resulted in two Nevada discoveries; a four-million ounce discovery in the Battle Mountain trend and a one-plus-million ounce discovery in the northern Carlin trend. He was also instrumental in establishing, and subsequently managing, Uranez' Mongolian gold exploration program. Mr. Cunningham has also been Vice President of Tenneco Minerals Company and a Resident Manager with Echo Bay Mining Company.
Q: Mr. Cunningham, with gold remaining steady above the $700/oz price what are your thoughts on gold and gold stocks moving forward?
A: I certainly believe that gold prices will continue to move upward although I also expect there will be corrections along the way. I have not seen the US investor jumping on the gold band wagon but if this happens we should see new highs. Financial problems that face the US economy would lead one to expect higher gold prices.However, I have learned not to predict gold prices. When I was with Tenneco Minerals we would have to set an annual average gold price for budgetary purposes. I can tell you that we were never close with the number we picked and as a result we were never on budget. Miranda is well positioned to take advantage of higher gold prices but can survive any down turns as well. We realize that exploration is high risk and discoveries do not happen over night. With a treasury of over $12 Million and a permanent staff of 3 veteran discovery oriented geologists we are prepared to succeed in any market.
Q: I was wondering if you could please summarize in a few sentences, your views on the effects that rapid capital cost escalations and the rising Canadian Dollar are having on earnings and profits of gold producing companies.
A: The US has always enjoyed cheap energy and with the worldwide demand for oil this era is coming to an end. Rising costs of energy effect many of the cost centers associated with mining and I expect to see these costs continue to rise. In order to maintain a steady profit margin, gold price will need to keep pace with these rising costs. We have recently seen both Barrick and Newmont build power plants in Nevada to help offset rising energy costs. It always pays to be a low cost producer, regardless of the commodity or the commodity price. Metals prices are cyclical and you always want to protect the downside. At Miranda we focus our exploration in the major gold trends of Nevada, specifically the Cortez Trend. Big deposits and high-grade deposits are less affected by rising costs. In addition, Miranda is an explorer and not a producer. We feel this is our niche in the mining sector and we focus on being one of the best when it comes to exploration. As such, we are not overly affected by rising Cap-Ex and production costs.
Q: If you could only buy and hold 1 stock (other than Miranda Gold) for the next 12 months which one would it be and why?
A: I follow many of the junior gold stocks, especially those exploring in Nevada. I prefer investing in the juniors as they expose investors to the possibility of a multiple return on their investment. Having said this I would also caution that they are very high-risk and not suitable for many investors. To pick a single company I would go outside the gold sector and mention Uranerz Energy (URZ). This is a bit self-serving as I sit on their Advisory Board. Regardless, this is a serious company run by very qualified mining engineers. They are involved in ISL uranium mining in the Powder River Basin of Wyoming and should be in production by 2010.
Q: Lastly, if possible can you please highlight one sector among resource stocks (e.g. it can aluminium stocks, nickel stocks, steel, gold, silver etc.) that you believe to be overbought and due for a correction and one sector that you believe to be oversold and due for a bounce and why.
A: I think we have recently seen the most obvious and needed correction. It came earlier this summer when the spot price of uranium began to decline. There were too many start up uranium companies without management experienced in this particular sector. This happens every time a commodity price takes off. With regards to an undervalued sector, I would like to think that the junior gold exploration sector is undervalued with regard to the recent upward surge in gold price. If indeed, the junior gold sector is undervalued and does rebound I would expect Miranda to be one of the companies that benefits. At Miranda we are expecting to see 3 properties drilled between now and the end of 2007. These include some of our most promising properties, Red Hill - a JV with Barrick, Red Canyon - a JV with Romarco Minerals and Angel Wings - a JV with White Bear Resources. I hope we are undervalued with respect to the potential of these properties. Time will tell.
Thank You in advance!
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