BERAL, INC.
Andrew G. Racz
Director of Research
300 East 54 Street, 26C
New York, New York 10022
Telephone: (212) 319-6949
Fax: (212) 753-1944

NORTHERN STAR MINING 

(NSM) 

Only Yesterday

Professor K. Goldbraith – The Depression Years

There are many explanations of mining properties; potential and promising.

The expiration is relatively simple, with higher gold price and better equipment; territories which were relatively expensive in the past are now becoming active gold mining possibilities.

In the case of Northern Star, we have the general proximity; happened to be in the gold belt in Quebec, Canada.

Northern is an active junior mine. The number of properties in that area, about eleven of them feature selective gold deposits, including Midway property for immediate exploration. Midway possesses all the attributes that are necessary to warrant underground excavation; an expiration which was not done in the past. Deep drilling thereby entice the value of the property.

The interesting point is that the commodity boom which is very much alive in the year 2004, may be continuing compounded until at least the year 2010. Surely, there are ups and downs. The macro economic factors for greater use of iron ore, copper, steel, scrap iron, is reflected in price increases of substantial magnitude.

Interestingly, gold has gone up in 2004 from $360 to $420 and then $540 an ounce in 2005. Nevertheless, because of the fact that the Chinese are now importing 5% of the world’s oil and manufacture 23% of the world’s steel, and produce 20% of various soft goods, all transported in container ships to the West, the shipping industry in the marketplace has expanded more than 100% in the last 12 to 18 months.

China represents a commodity boom via legitimate and growing demand that the world has never seen. China has 1.2 billion people, India a billion, Pakistan almost 200 million, and what politicians and economists didn’t take into account was that one Chinese person, 01if he or she is middle class, consumes the same amount of commodities such as oil, copper, aluminum, as a typical person in Kokomo, Indiana.

Late in December in 2005, there was speculation that the Chinese would increase its gold reserves. Gold reserves in 2006 may double it to 50,000 by the end of the decade. (2010)

The target is an increase of gold reserves to 25,000 tons from 600 tons in 2006.

The Gold in the 21st Century     

Since the exploration began in 2003, the company has completed some 58 diamond drilling totaling over 50,000 feet of gold. It has complimented a system the analysis of a massive geological information from the historical excavation of the Malartic gold fields. Modern technology changed many details. The original exploration bought in the old areas; it has been expanded into various geographical territories. The successful conclusion of the property acquisition is very good; at the end of 2004, the companies began to ship in complete control over the mineral claims covering the former mine and additions.

Let us now look at the major financial parameters:

1. The Midway property lies we’ve seen near the Agnico Eagle mining district,
the mineral claims covered the Malartic gold fields that in the past produced 2 million ounces of gold.

2. Building over 50,000 surface drilling sites, Northern Star has initiated plans to take advantage of all mining shifts.

3. Barrach has welcomed this new shareholder when Northern Star acquired territories for 750,000 shares.

The projection in the immediate future are actually encouraging. In the 2006, the company’s likely to produce 30,000 ounces of gold. This would be refined at $600 price, $18M dollars. In the second year, the possibility of 100,000 ounces of gold would represent the revenue be at $60M, and in 2008, 120-150,000 ounce of gold production. The revenue base even can touch $100M.

Considering that the company has 70M shares gold production would be 25 cents in 2006; at 100,000 once production is nearly $1.00 per share. We can see that NSM could be considered gold mining serious stock. The gold revenue would be two and a half times the current capitalization, which is considered almost startling. A new star is born. After a total potential mining of 2M ounces is almost certain times the revenue be estimated is $1,200,000. The market cap is miniscule compared to the potential.

Our view is that Northern Star is a vastly undervalued company. An investment of $6M in US which is 10% of the company could control the flowing stream of projections:

This is actually agreed to a virtual revenue stream of 24.5 ounce of gold per share at a price of 600 represents $14.700M.

Accordingly $6M investment represents $14.700 revenue stream in 3 years. 1 share – 85 cents could appreciate to $147 in gold or cash.

If we take into account that the total production is 2M ounce of gold.

As a junior mine, such figures are almost unheard of and therefore we recommend the purchase of the common stock.

(Article 17 - posted January 16, 2006)

e-mail: mlikar@aol.com

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