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Gold/Mining/Energy : Naxos Resources (NAXOF) -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brubaker who wrote (8278)	1/18/1998 2:41:00 PM
From: KRosenfeld	Read Replies (1) \| Respond to of 20681

Larry, You write "My question to you is how do you DD a black box? You or anyone else posting on this thread (and quite possibly Dr. Johnon himself) has no idea whether Naxos will ultimately be successful in achieving economic recovery." And indeed that is correct. If I knew that answer, I would either be mortgaging my house, my parent's house, and any other house I could get my hands on, or I would be moving to powerless Quebec and shorting the hell out of the stock. Obviously, I don't know if the J-L Process will work for sure or will be economical (although at this point it is looking very good to me). Hence, I have only put up risk capital, money that if lost will not change my life at all. And if you go back ten months or so of posts, you will see that many of us on this thread have, on many occassions, stressed that this stock is as volatile and as speculative as they come; that any money invested in Naxos may be lost. We have always urged people to do their DD, to understand what they are getting themselves into. When one buys Naxos, or any desert dirt for that matter, they are buying something that is probably as different a stock as they have ever purchased. If Naxos fails, so be it. I have done my DD, and I will accept that as one of the possibilities when I first invested in Naxos (and each time I invested some more). I will be upset over the numerous people who bought Naxos on my recommendation however (although I most definately warned them of the volatile and speculative nature of this stock). If Naxos is successful, however, my life will change. As Mr. Pearson said when congratulating me on my new daughter "you've done more than bring a daughter into this world; your partnership has produced an heiress to a fortune!" I only hope his words turn out to be prophetic (and I am liking my chances of that happening quite alot right now). Ken Rosenfeld

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