first majestic silver

Durban Deep Delight

November 1, 1998

Durban Deep is probably the premier gold investment on the market today. South African gold stocks in general offer excellent values in today's gold share market, that is if you are interested in making money!


Risks in SA have been way overblown! After doing business in the SA gold shares for 20 years, I went to that country to see for myself just what the political and economic situation was. I found a bunch of GOOD people. Yes, there are places that you would not want to go and other places that you would use the usual common sense about security. You can also get SHOT in Shreveport, LA, ( Las Vegas of the South ), any afternoon. There are areas of New Orleans that a coach will not go to recruit a prospective athlete. That aside, the sheer beauty of the country will overwhelm any new visitor. In short it AIN'T the way you see it portrayed on the networks.

My primary interest is in making money. In 1978, the first money I had to invest was up over 140 times in 4-5 years with the SA shares. There was a German salesman that called on me, I knew he was a millionaire and I shared some of my concerns about making money with him and he introduced me to the gold market. One thing led to another, and after doing my due diligence, I met Richard G. Johnson, a broker in Shreveport, LA that specializes in the SA gold shares. That was my first experience making money with money.

Relative Risks

Another thing I must mention is the houses in South Africa do not have screens on the windows because they have little or no bugs, insects flying around to irritate and BITE you. The environment has not been screwed up with all the chemicals that we have in the USA today.

The main risk with the North American shares is the government regulations - and I view that risk to production as more than any political risk in South Africa.

Sure there is risk in all places we invest, which is a good reason to have a diversified portfolio, allowing YOUR risk tolerance to be reflected in the mix (i.e. some would want a mutual fund, while another might want a heavy weighing in a stock like Durban Deep. [DROOY is the NASDAQ ADR symbol in the USA, and DRD is the symbol in the JSE]

Following are reasons I like DROOY:

- Huge gold reserves with a market values at only $2-$25 per ounce.

- These shares are like buying a call option on the gold price with NO expiration date. They should NOT be traded. Durban Deep is my largest share position and #1 gold play. Only I ain't PLAYIN, I am DEAD serious on makin MONEY!

- 800,000 ounce annual gold production, 42 million ounces in reserves - and growing every day. Furthermore, plans and actions are in place to increase production to over one million ounces by the year 2001.

- The profit potential is HUGE. My good friend Jim Blanchard in his "Gold Newsletter" mentions 2400% profit potential. Jim called me the other day, and I told him that was REAL LOW. This share with a gold price of $500 plus could easy be in the hundreds of dollars. Reason- the whole world is used to makin money in the STOCK market. Well, when the FAT LADY SINGS and she is singin NOW and all them PO BOYS start lookin for safety and they want to make money they will turn to gold shares, the whole gold share market is less them HALF the value of EXXON stock. Now for you "A" students that potential is HUGE!

- Roger Kebble ( Durban Chairman) is one of the best miners in the world. He knows how to get the job done at the most reasonable price with the most efficient result. His son, Brett, is an attorney, an accountant and a FINANCIAL GENIUS. I TRUST my money with these guys! I have personally been to the DEPTHS of Durban Deep mine.

Now the name is misleading because much of the ore is on the SURFACE. Durban Deep today is comprised of many (formerly) separate mines under one management. It consists of surface operations, dump operations --where new technology is removing gold from formerly processed ore.

- Rand depreciation means huge profits for Durban Deep and other SA gold mines. Here is a very important point most people do not understand, but is a very important reason why you should own SA golds. When the Rand drops in value versus the US dollar or British /Sterling, it in effect lowers the production cost of the mines. You see expenses are paid in local currency, the Rand, but the product, GOLD is sold in foreign currency. When I was there, the miners were talking about the RAND falling to 10 to 1 to the dollar or 10 cents rather than the current 25 cents. They explained that every cent fall in the Rand, the more money (PROFIT) the mines made. Consequently production costs have declined to around $225 per ounce with the fall in the Rand.

- Durban Deep recently acquired the Crown Jewels property just south of Johannesburg. This adds HUGE potential to reserves. Also the richest gold deposits are located in the gold veins in the area south of the city. There are places that have proven 3-5 ounces of gold per ton of ore. These veins are usually very shallow and are only 6 to 12 inches thick but very RICH. I have walked down an incline shaft in this area to such a vein.

That is it in a nut shell. If you are serious about making money in this gold bull market, you should consider a position in Durban Deep for your portfolio.

24 karat gold is pure elemental gold.
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