Naxos Resources (NAXOF) Message Board

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Gold/Mining/Energy : Naxos Resources (NAXOF)

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To: Larry Brubaker who wrote (8278)	1/18/1998 6:36:00 PM
From: Henry Volquardsen	of 20681

Larry, My question to you is how do you DD a black box? The same way you do DD on a high tech or bio tech firm that has a technology outside of your field of expertise. You learn as much about it as you can and ask questions. Then you bounce ideas off of others and try to make a decision about whether it sounds plausible. Also in my opinion an important part of doing due diligence is keeping your investment consistent with the risk of instrument. I don't agree with the charachterization of the Johnson-Lett as a 'black box'. After months of reading what has been available from the company, statements about the proceedings with the Alberta exchange, postings on SI and and analysis by outsiders (Baines, Snow etc) I think it is possible to piece together a lot about what type of ore we are dealing with and what the essential nature of the Johnson-Lett process is. I have discussed this with a number of people and feel fairly confident that I have the basic outline correct. I then took this information and started contacting people in the mining industry. Because of my business I have been able to get access to some very serious people in the mining industry. I have been careful about not giving away any Naxos secrets but have asked some basic questions about technical issues to see if what I have been hearing sounds plausible. I learned some very interesting things in the process. I then take this information and present to several people who I have been actively discussing Naxos with and get their opinion of my conclusions. I believe that is how one does due diligence in this type of situation. Try to learn as much as possible, ask lots of questions of knowledgeable people who you can trust and then get second opinions. FWIW this process is ongoing and my understanding of the Naxos situation is continually adjusting to new information. In the process I have learned a lot about other companies in this group. I am very encouraged in what I have learned about Naxos. I believe the Johnson-Lett process is important but it is not a black box or a revolutionary advance. It is a sound scientific application of known principles. I believe that we are underestmating the uniqueness of Franklin Lake. Yes many of the dirts have similar ores but I believe they are not of a high enough grade to be viable given the expense of the process. I believe Naxos is still a high risk situation but well worth the investment. I have no investment in any other dirt but own a good size position in Naxos. Henry

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