Q:   Now that we get to 2007 and ever since I saw you about ten days ago, the whole world has changed. The dollar declined, foreigners were pulling money out, the Middle East is buying American companies left and right, gold has increased its value, and it's being followed now by other commodities, including molybdenum. So Jasper was formed in the Depression and is now a public company in a different climate.

A:   Yes.

Q:   Therefore, there must be a value difference or market price difference between what was there in the year 2000 and now in 2007.

Another interesting feature, which is going to change, is the interest between precious metals and base metals.

Gold has always played a role in the world's financial works. It has always been discussed as a commodity or a currency or a store of value. Gold always had a special place in the market.

Wilbur Ross sold International Steel to the Indian tycoon L.N. Mittal for $4.5 billion. Mittal became the largest steel company in the world. And is now listed on the NYSE. Today it has a market cap of $100 billion.

The Inland Steel-Mittal sale began to create a chain reaction. It was the catalyst of the revitalization of the international steel industry. We call the beginning of the commodity boom of the 21st Century.

A:   Yes, I think so.

Q:   Since you have a long-term background, the smaller public companies of which yours is one, do they reflect in any way the increase in the price of silver, zinc and molybdenum at all?

A:   I don't think they do, no.

Q:   Why is that?

A:   Well, I think real investment funds have gone into larger companies or companies with properties that are on production. But I don't think anyone recognizes the value of even Jasper's molybdenum properties, Erie Creek, Isintok and McFarlane. People just don't recognize that all three of those properties, which are located in different areas, all have some significant potential to develop some good molybdenum, copper, gold ore bodies.

Q:   I have noticed that everything has changed in the last ten days in the marketplace, and some of the leading molybdenum companies started to move. Idaho General is up 30 percent. That's almost $7.00. Molybdenum is a main holding of yours. Correct?

A:   Yes.

Q:   I've also heard that on the London Metal Exchange for Dubai, molybdenum will be trading like any other commodity. What would it mean to the industry?

A:   Well, I think molybdenum is not really understood by most investors, or hasn't been to this point. Molybdenum is essentially used every time somebody makes a piece of steel anywhere in the world; they use several pounds of molybdenum. Generally, I don't think the public or the investing public is aware of the multitude of uses of molybdenum. But I think for the small explorer producer such as ourselves, to have a public market, a market where molybdenum is traded, will help with the general awareness of molybdenum and people will begin to look to smaller exploration companies like Jasper and see that we have the possibility of finding a significant molybdenum ore body.

Q:   I have heard that in two or four years, there will be a very acute shortage of molybdenum. Would you agree with that?

A:   It would appear that that's right. There are not many mines or even mines with reasonable grade coming on production. And it's difficult. Molybdenum is difficult to find in a significantly large enough resource with a good enough grade that it justifies developing a mine.

Q:   If you foresee at any one time a molybdenum shortage, and because of the smallness of the market - it's 450 million pounds a year - an additional 20 million pounds demand is quite significant. And what is noticeable about molybdenum is that wherever it is used in pipelines, in catalysts or steel, it is a very small part of the overall project.

A:   Yes.

Q:   Which means that if there is a shortage, the price can go up very sharply.

A:   Yes. I think the price has the possibility of increasing very dramatically.

Q:   If the price goes up, and some people say next year it will be $45 and then eventually over $50, would it have an effect and the market would recognize smaller exploration companies because of the reserves they have and their future production?

A:   I think the market would recognize that, yes.

Q:   Let me concentrate for a minute on your company. You have less than 50,000,000 shares. At $.35, it's a $16 million market cap. How much molybdenum did you identify underground?

A:   Well, we have three active exploration projects. The best one is McFarlane Lydy, which sits beside the Sphinx property which has been developed by Eagle Plains. And it's got a fairly large molybdenum deposit on it, though it is fairly low grade. We have drilled a number of holes on our McFarlane property and mostly recently we've reported results where we intersected a group of veins on the McFarlane property. But there's 7.3 meters of grade that is .889 percent molybdenum, and there were some veins within that intersection that approached 2 percent molybdenum. All in all, that's a very high grade molybdenum. We've got very short intersections in some other drill holes that we think are drilled close to the trend but really off the trend. They also were up in the 2 percent molybdenum area, but they were very very narrow veins, two or three centimeters. But we think because of the surface shows that we have about 900 meters to the west of our high-grade hole, we think that these veins trend out towards the west and we, of course, are going to drill that just as soon as we can. But we think that there's a possibility for a very good deposit there of high grade, tending towards 3/4 to 80 percent of one percent molybdenum, which is ore that in the ground would have a value at today's price of molybdenum of over $600 a ton. Of course, you couldn't sell it for that in the ground but with mining costs to produce a molybdenum concentrate, it would be a very profitable operation.

Q:   Let me go to a number. How much tonnage can you identify?

A:   Well, we can't really be certain how much tonnage we have now. But our management, our geologists feel that if these two shows are linked up, we could be anywhere from sort of 2 million to 5 million tons of reasonably high-grade molybdenum. That's what our hope is and that's what we're--

Q:   If you take let's say 2 million tonnage at $600, that's $1.2 billion.

A:   Yes.

Q:   So you are saying that a company with a less than $20 million market cap is hiding - I use this expression - a potential value of more than one billion dollars.

A:   Yes. But that's the mining business.

Q:   It may be the mining business, but we are now talking about a metal which will be of more and more use, the price will go up. So what you call $600 today may be $700-800 in three year's time, and if the stock itself gets to a level that you get partners or financing, the value per share calculated going forward to the billion dollar level is getting nearer and nearer. And the whole calculation here is that we start with $20 million, we start with a million tons at $600, and potentially one billion. How we get it is obviously raising money, getting partners, and producing molybdenum and selling it on the marketplace. It's a logical process.

A:   Yes.

Q:   As you mentioned, twenty years ago nobody cared. Everybody abandoned steel. Bethlehem Steel went bankrupt, don't forget. And today steel is in short supply. U.S. Steel is now over $100 per share, and, frankly, I'll never forget it. He was an intelligent man. So in a few years because of what was happening in the Far East and everywhere, U.S. Steel is $100. Now that's a fact. And if U.S. Steel is $100, then nickel, molybdenum, iron ore, they all have to go with it because you can't have steel without the ingredients.

A:   No, you can't. I have believed in commodities, since about 1999.

Q:   They have taken off.

A:   I have played my personal market portfolio. I have bought only really mining and some oil and gas companies.

Q:   You should have bought China Air. It was $60 three weeks ago and now it's $140. People travel in the Far East. People who travel need airplanes, the airplanes need molybdenum. It's a very logical sequence.

A:   Yes, it is a logical sequence.

Q:   When I went to Cambridge, very few people had that high education, and I remember in the early sixties under Harold Wilson, the prime minister, he said, "It's a ruthlessly competing scientific world. We cannot afford to lose the talent or a single boy or girl." And they built more universities and now England has a much broader picture. So in other words, there is a logic. Now, you see the logic in the price of China Air. We have seen a number of universities. We've seen U.S. Steel. The world develops and eventually gets to this little metal called molybdenum. Part of the process is becoming important. If it becomes important, the price goes up and they find a little holding company such as Jasper and one day you wake up and the hedge funds start buying Jasper because of the molybdenum, and they will give you maybe $30 million to develop it, but they own half of the company. That's a logical sequence of events.

A:   Yes. That is exactly right.

Q:   Basically that's the world we live in. Suppose you develop molybdenum. You have partners, people put in money, the stock goes up. Then you still have a whole portfolio of lead, copper, zinc, silver, gold, molybdenum and tungsten, whatever, and you're obviously going to develop it or get partners and get the whole company moving.

A:   Yes.

Q:   So the only thing which is missing here is the catalyst to recognize your assets, develop them, be happy with the higher price and make money.

A:   Yes.

Andrew Racz

(Article 64 - posted September 27, 2007)

e-mail: mlikar@aol.com

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