Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944

Romios Gold

July 7, 2009


Current price:


2009 price range:

5¢ - 12¢


Fully Diluted:
52 Week Range:
Recent Share Price:
Market Capitalization:
Cash on Hand:
Cash (Fully diluted approx.)

82.2 million shares
92.5 million shares
$0.48 - $0.055 CAD
$0.12 CAD
$9.8 million
$2.0 million
$5.7 million

TSX.V - RG Frankfurt - D4R OTC - RMIOF

Interview with
Tom Drivas
President & CEO,
Romios Gold Resources Inc.

Q:   Tom, you have a gold and base metal exploration company. Gold exploration companies became popular in the last two years on the market. What is the reason for that, and what is the outlook for the continual popularity?

A:   Well, the reason for that was the world demand for commodity prices in the last year or so, in the last few months, the economic uncertainty worldwide. The reason for the outlook for the demand is that the world demand for commodities will be going up.

Q:   When it comes to gold, the price has changed considerably. Is drilling activity related to the price?

A:   Yes.

Q:   Why?

A:   Well, we view drilling as the truth machine. A lot of companies they state that they have this, they have that, but once you come to drilling that's when the results are coming out. So I think people are getting excited around drilling time because that's when you could come up with a very good result and the market cap and the price of the stock...

Q:   But the actual drilling activity, new companies going into gold drilling in Canada and other parts of the world, is it a growing phenomenon?

A:   For the last few years it was a growing phenomenon. For this year, I think the activity is down because of the worldwide economic crisis. There is no queston, everything is more difficult.

Q:   Is it fair to say that you need three things -- good prospects, money, and capable management who really understands the drilling and not just using up the money they raised the first time in the market.

A:   You're right on.

Q:   So in other words, money is either available or not. At the moment, money is a bit tight all over the world. But capable management is few and far between. You can't create geologists or mineral engineers out of the blue. You have to train them in school. But in terms of manpower, it's a limited market.

A:   I agree with you. For example, revenues over the last fifteen years or so, needed very experienced people, management, and our board of directors has over 150 years combined experience in the industry and in all aspects of the industry.

Romios Gold is:

Focused on the acquisition and exploration of North American

Precious and base metal prospects.

Managed by experienced professionals.

Exploration Projects in Canada:

Galore Creek Area - British Columbia

La Corne Township - Quebec

Lundmark-Akow - Ontario

Timmins-Hislop - Ontario

Exploration Projects in U.S.A.:

Scossa Gold - Nevada

Q:   Let's turn very briefly to the specifics. How many major drilling activities do you have at the moment?

A:   We finished the last drilling activity in our property in Quebec, and now as of the end of June, or July 1st, let's say, we're funded and we plan to take two drilling activities in our main property in British Columbia, one in the Newmont Lake.


Newmont Lake

1,406,000 tons of NI 43-101 inferred resources.

200,000 ounces gold at 4.43 g/t.

6,790,000 lbs. copper at 0.22%

291,000 ounces silver at 6.4 g/t


Located adjacent to substantially completed Galore Creek access road and near nova Gold/Teck-Cominoco's recently proposed Galone Creek mill site.

Q:   Let me ask you a question. What do you expect from these two properties? How much money do you throw in? How much money is needed? And where would the company be a year from now from expected results in British Columbia?

A:   When we say expected results, we did some drilling in the same properties last year, and we were fortunate to come up with some very good results that we consider exceptional results in both properties. It's very unfortunate for us that these results came last October-November-December when the market was collapsing.

Q:   It smashed very stock like yours.

A:   Yes. And we didn't get any credit for it. So on the basis of that, on the basis of this past result, we feel very excited, we feel very confident that we have a very good chance of coming out with exceptional results.

Q:   What did you achieve last year?

A:   First of all, on the Newmont Lake property we drilled some metallurgical holes and we realized that we have a high-grade pressure zone. We're getting some really high-grade gold numbers that they were over 750 grams of gold and over 300 grams of silver and copper. So we did some geophysics, and we're going to be testing that theory, that possibility, early next year.

Q:   Let me just simplify something. Is the Newmont Lake drilling last year, how much gold did you identify and what confirmation do you have now?

A:   We have approximately 300,000 ounces of gold equivalent. The geophysical signature on the possible expansion to the south, if that proves to be correct, that resource could go up by three or four times, if not more. Now, in addition to that we have the other property, the Trek property, that we drilled, and we came up with 105 feet of 2 percent copper, one gram of gold and 28 grams of silver. That was within 431 feet of .61 percent copper, half a gram of gold and 78 grams of silver. Our second hole on the Trek property was the hole was basically 1,054 feet. We had 1,034 feet, over 1,000 feet mineralized from top to bottom, with some high-grade sections. There were some sections there that were running up to 39 grams of gold. So we drilled six holes on the Trek property and all of them are mineralized. Basically, the intercepts that we have there, it points to a huge potential, potentially a world-class deposit. And this is our second target for the summer. We're going to be drilling for additional gold. 

Mineral Resources Estimate: Newmont Lake Property

Inferred resource for North West Zone calculated to be 1.406 million tonnes at a grade of 4.43 g/t. gold, 0.22% copper and 6.4 g/t silver.

Data equates to in situ resources of 200,000 ozs. of gold, 6.79 million lbs. of copper and 291,000 ozs. of silver.

Resource is compliant with National Instrument 43-101 and filed on SEDAR as of May 16, 2007.

Q:   Now, we agree on one thing, your stock, like any other stock, was smashed by the market. However, for drilling you need cash. Now, assume that you are successful this year because you have 1.5 million allocated, is it plausible that you would have between 700,000 to a million ounces?

A:   With the drilling that we're going to do, it won't be possible to have certified 43101. This drilling would give us a very good indication of the extent of mineralization. Then we're going to have to, either this year or next year, go back with additional drilling machines and do additional drilling machines and do additional drilling.

Q:   So where would you end up this year?

A:  We have a very good indication that we've got a million there plus potential gold reserves on Newmont Lake, and potentially a world-class potential deposit on the Trek property.

Q:   If you have another $3 or $4 million, what would you do? Just briefly, what would you do?

A:   I would get three drills rather than one drill and drill additional holes, and that would give more development of those properties.

Q:   We have agreed on the following so far. You have targets, you need money, you have let's say 300,000 ounces of 43101 certified gold, and a team which can go further. Let's do a numbers game. With 82,000,000 shares outstanding at 10?, you have a market cap of $8 million which used to be so small that nobody was even reading your annual report. But now it's common. And you have $1.5 million which may enable you to double the reserves. According to industry standards, how much is the 300,000 ounces already established reserve worth?

A:   It's a difficult question for me to say how much reserves are worth. We know that gold is trading at $900, and 300,000 ounces of gold equivalent has at $100 per ounce. The future value of 500,000 ounces is $50 million, 5 times our current market cap. 

Market Cap: $10M

Current 43101 reserve

300,000 ounces

Per ounce $100/ounce


Per share/price


2009 drilling ($1.5M budget)


Assume: 200,000 - 600,000 ounces

$10 - $30M




$40 - $60M
4x - 6x

Q:   What is the unofficial market price? 300,000 ounces, not so difficult to excavate...give me a rough number.

A:   Andrew, you're the analyst. I would rather you put a price on it rather than me.

Q:   If it's $100, and I tell you why it may be worth $30 million, which is three times or more of the market price of the company. Since we are near to two giants, Trek and Newmont Gold, who may buy those reserves. If they find that the reserve can be expanded substantially let's say to a million, two million, with their financial backing over years, they may pay even more. They may pay $200, in which case the value of the company is $60 million, which is quite attractive when you look at a 10¢ stock. 

A:   You can look at it another way. The other way is last year our budget was about $6 million, so our market cap now is basically the exploration budget that we had last year. Last we drilled three properties, the Newmont Lake, the Trek property. We had successes in all three properties. Sometimes you budget and you don't come up with anything.

Q:   As you go into 2010-2011-2012, the gold market is unlikely to decline and become less important. The monetary factors and the macro economic factors all point to governments, individuals will put more gold away. For instance, gold coins are now selling for three or four times the rate of last year, and the German government even opened up ATM machines for people to buy gold. Meanwhile, the Chinese are diversifying from dollars. So there is very little to create a scenario that gold is less important. Now, if gold goes to let's say $1,500, which is a possibility, the mining companies will consolidate. Companies like yours will be in demand because your reserves add up to well above market cap, a much bigger reserve. Therefore, the economies of scale make you attractive for the larger companies. That's the macro economic trend. In other words, when you have 300,000 or 600,000 ounces of gold, you become very attractive to a larger company because they have to deal in large numbers, and you can't just find gold. The old expression that the best way to buy a good company is on the floor of the New York Stock Exchange. For instance, Legg Mason, which is a trillion-dollar money management company, very cheap, $24 down from $100, is being accumulated by a well-known corporate takeover artist. A trillion dollars is a great deal of money to manage. A million ounces of gold is a great deal of gold to be added to a gold bank, let's say like Trek or Barrick or Goldcorp or U.S. Gold.

So that's the basic trend we are in. Now we come down to really one question, how to raise the money for the company to get bigger reserves. You are not going to be responsible for the price of gold, about the trend of acquisitions, and so on. The company at the moment is boiling down to setting up a program over two or three years to raise money and try to find more gold. Is that fair to say?

A:   It is fair, yes.

Q:   In that case, let's leave it at that, and the next stage is raising money and then we have to discuss what will happen to the money, and if the price of the stock goes up, how to raise more money. Fair enough?

A:   Fair enough. In closing, what I want to tell you is that I agree with you that for the next year or two the price of gold or the demand for gold will increase, especially with all this amount of money that has been spent by different governments and the amount of debt. Now, in addition to that what I'd like to add is a good deposit, a sizeable mineral deposit is very hard to find. If a small company finds one, then all the reasons for either bigger companies to come in.

Q:   Lastly, you have to admit, in any complex situation, growth and acquisition, nobody can compete with a Hungarian. Correct? After all, Barrick was built by acquisiton.


Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.



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Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail:

Copyright © 2011 Andrew Racz. All Rights Reserved.