In this article, the third of a three part interview in The Gold Report, Greg McCoach, editor of The Mining Speculator, gives us his top choices for mining equities. Learn why Greg believes we need to do some comparison shopping right now in the junior market and why, although he's bullish on uranium, there are just a few uranium miners he recommends.

Greg is an entrepreneur who has successfully started and run several businesses the past 22 years. For the last eight of these years he has been involved with the precious metals industry as a bullion dealer (AmeriGold), investor, and newsletter writer .(See Part I and Part II).

TGR: Tell us about some of the stocks you like.

MCCOACH: At The Mining Speculator, which I've been writing since about June 2000, I don t cover lots and lots of stocks. I believe in covering and reporting on about 20 to 25 stocks at any given time. Since June 2000 I have only recommended 71 stocks, and out of those 71 stocks, we have had 7 losers. We have had 16 stocks that have had over 1000% return. We have had 41% of all the stocks at least double while they were recommendations, and it s been a good track record. We re enjoying it right now.

The market has been volatile for the mining stocks. Right now we re on the down side of the volatility. It s been a little bit frustrating for people, but I try to tell people that these metal prices are going nowhere but higher. Under the current circumstances, sooner or later mining stocks will run again. And each time they run, they seem to go to new highs. I am one of those people that like to take a little bit of money off the table when profits are running. I firmly believe you should take 25% to 35% of your core positions out because you make such big gains when the markets are running. Then hold some more cash until the market comes back and you can buy back those companies, or you can get some new stories you re interested in.

TGR: At what point do you take your 25% to 35% off the table? Let s say you buy a stock at a $1.00 it goes up 50% or a 100% or ?

MCCOACH: Right. I don t take profit I want at least a double. At 100%, I will take 25% off the table. Sometimes when these markets run, these junior mining stocks can go up or down for absolutely no reason. That s how volatile they are. We ve been in this bull market for a long time and our stocks have been all over the place. There are periods of times when they re absolutely boring, right? Then, all of a sudden they catch fire again. So whenever we run and we get a double or a triple, I usually take 25% off the table, and try to pay myself back.

I try to get my original money back. Once I get my original money back, then I feel like I am playing with the casino s money, right? So, I like to try to do that as quickly as possible. You may have to weather a few downturns before you get to those ultimately higher levels. Take Excellon Resources Inc. (TSX:EXN) for example. We recommended it and I think it was at 18 cents or 20 cents. The stock recently hit $1.95. That s over a five year period. It s done very well for us, and I still believe that Excellon is a great choice because it s a production story that has a great cash flow, and I think for these juniors cash flow is going to become more and more important.

In the last six years we have been able to raise money very easily for these exploration stories, but moving forward, with the liquidity crunch and risk capital starting to get much tighter, I think it s going to get harder and harder for these exploration juniors to raise money. Most of them don t have cash flow.

That s why I am leaning more towards production and near term production stories in the juniors. At this point, do you still want somebody who has cash flow that still has metals and that has great exploration upside, or do you want someone with great exploration upside but no cash flow? I think we need to do some comparison shopping right now in this junior market, and I am leaning more and more towards companies that have cash flow or near term cash flow.

And I am getting more oriented towards precious metals I like uranium still. There are over 550 uranium companies, but in my opinion, there are only 15 of them worth investing in. Those 15 can make people a lot of money in the next three to four years. And as long as you re committed to the long term of this market and you choose the right companies, I think you can do phenomenally well in uranium. These prices are not going to stay where they are. Supply and demand is becoming grossly imbalanced at this point. That s going to have to be reflected in higher prices, and that s going to be very good for a near term producer or producer of uranium. I am bullish on uranium.

TGR: Do you want to give us a couple of uranium companies?

MCCOACH: I like Bluerock Resources Ltd. (CA:BRD) they have two properties in Utah that as a junior you can buy at 80 to 85 cents right now. And they ve already got their toll mill agreement with the White Mesa Mill, which is owned by Denison Mines. Now, there are very few people who can bring any new uranium production to market. All of the big players like Uranium 1 and Cameco they ve been talking about it, but it keeps failing. . .Cameco's Cigar Lake, for example. If it happens, it will be in 2012. Well, that s four years away, and to me, that s not going to happen. Uranium 1 was supposed to have all this uranium production, and now they ve fallen massively short on what they were projecting their production to be. So, that stock has been pummeled.

There are a few companies doing ISR [in situ recovery], where instead of underground or open pit mining to get the uranium out of the ground, you flush water through certain uranium systems and extract the uranium through water extraction. It's less harmful to the environment, and it s very low cost, but it s highly technical so you need a very experienced team of people who know what they re doing. There are only seven or eight teams that really have the technical knowledge to do that effectively. Two to look at on the ISR side here in the U.S. are Uranium Energy (UEC:AMEX) and UR Energy (URE) .

They are the only two ISR projects that I know of who have already filed their permits. In other words, they could be the first two companies to be in production using ISR to produce the uranium in the U.S. in the next couple of years. It is about an 18 month process, and they both have submitted their applications for those permits in August, September of last year. So, the clock is running by 2009, both of those companies could be producing. So, those are the prettiest girls on the block, so to speak.

I like those, and as far as precious metals stocks, the number one stock at this point is Pediment Exploration Ltd. (PEZ:TSX V, P5E:FSE), working in Baja, Mexico. That s a major gold discovery in the making. Look at the most recent press release for Pediment regarding their Las Colinas Project. Echo Bay back in the '90s drilled this out, and when gold prices went low, Echo Bay basically went bankrupt and got taken over by Kinross. Kinross didn t want the properties they let them go. Pediment picked them up, wisely, when they were cheap, and now they re drilling them, and they re adding to the work that Echo Bay did back in the '90s. They have made some major discovery holes on top of what Echo Bay had. And this resource is growing quite rapidly.

In April of last year I recommended it at 75 cents. It has hit as high as $3.65 here in the last 10 months. I think it is around $2.50 right now. I clearly see this as a $6 to $7 stock when the market kicks back into gear. And I believe they have should have some sort of 43 101 resource later in the summer when they finish up some more rounds of drilling. I think they easily have two, three, four million ounces of gold.

Back to Excellon, who I mentioned before and really like. I think they have about 150 million shares outstanding, but they are a production story. They re making money they just paid off their bank loan. And it looks like now they re going to build their own mill. They ve been shipping their ore to one of Penoles' mills (Penoles is a mining company down in Mexico), but now I think Excellon s ready to take the next step of building their own mill at the Platosa Project down at Durango, Mexico. I like it because not only is it a cash flow story, but also they are onto what is called a carbonate replacement system in the largest, most prolific silver district in the world, down in North Central Mexico.

Excellon has a property right in the middle of this, and these carbonate replacement systems in this area tend to be somewhere between 55 and 65 million tons, and they re very high grade. They re still in the early stages of the discovery once you get onto these systems, you just follow them. I think it s just a matter of time before they start getting into some really big chunks of ore that is going to greatly add to their tonnage.

And as far as Penoles, which is a major silver producer, they were a 50 cent stock years and years ago, and they got onto one of these carbonate replacement systems, and it kept getting bigger and bigger and bigger as each year went on. It really made Penoles what they are today. I think Excellon has been shopping around in those areas.

It s still a great value, even though it has a large number of shares outstanding. I think at some point it s going to have so much cash that they can start buying their own shares back. I think that s a very solid story.

TGR: What do you think about Vangold Resources Ltd. (TSX V:VAN)?

MCCOACH: The thing that I am most optimistic about is this holding they have called International Beryllium Corp. (TSX.V:IB).

Beryllium is a metal used in flat screen TVs and computer monitors. It has gone from a very cheap per pound price to thousands of dollars per pound. I like the idea of this because Vangold wisely got involved with somebody who had gobbled up a lot of the beryllium assets in the world, and Vangold now owns 25 million shares of International Beryllium I think is one of the largest stockholders, if not the largest. International Beryllium opened up at 50 cents when it first started trading it s now trading close to 95 cents. I think that s a good story.

TGR: How about Terraco Gold, Inc. (TSX.V:TEN) ?

MCCOACH: Terraco is a very interesting story on the downside right now because of the first round of drilling that they had on their Moonlight project in Nevada. They didn t hit what they were hoping to find. Well, this is only first stage they only put in 18 holes so they have a lot more drilling to do before we know what we have or don t have there. What is interesting to me about the Moonlight Project is that it butts up against the Spring Valley project of Midway Gold Corp. (AMEX/TSX.V:MDW MDWGF.PK) .

I have been out on these projects sites twice myself, and the reason I like Terraco is this property has never been drilled until this recent round of drilling by Terraco, which we just got the assays back from. And the mineralization that Midway is finding with Spring Valley is high grade gold, half an ounce gold. They have a lot of drill holes in, and they have Barrick, who I think has come in and put in $10 to $12 million in the Spring Valley project. They like it.

And the more drilling they do, the more they like it. So, eventually, I think Midway could be taken out or at least Barrick could take out the Spring Valley project. I like the people. Ken Snyder, who discovered the Midas Mine for Newmont years ago, is working on the project. He s been hired as a consultant to come in and look at this. He s excited about it he believes that there s something there. But, again, until we get more drilling done, we re not going to know. That s basically Terraco.

TGR: And Terraco and Midway are kind of connected.

MCCOACH: Yes, I have been covering Midway for a long time. I like Midway I recommended it when it was around 80 to 85 cents. It s been as high as $4 recently. I think it s a $10 stock or higher, as they keep doing their drilling. They re going to do a lot of drilling this summer. It is definitely an economic mine in the making, whether it gets bought out or Midway puts into production themselves.

TGR: Time will tell. I see you also follow PolyMet Mining (TSX: POM, AMEX: PLM) and Duluth Metals Limited (TSX:DM).

MCCOACH: Yes, PolyMet Mining has been my longest term recommendation. It s hard to believe, looking back, that I actually recommended this at 5 cents Canadian and 3 cents U.S. People ask me, Well, Greg, how could you recommend this stock so cheap? I said because I knew the people involved I understood that it wouldn t go bankrupt. So, I figured at this point there was only way the stock could go. And I figured we d get involved, and it s been our biggest performer to date in the last couple of years. It s hit $5.40 it s back down to the $3.20 level recently.

But PolyMet has an amazing deposit called the NorthMet deposit, which is a huge PolyMetallic resource copper, gold, silver, palladium, cobalt all in one rock. The in situ value of the metal is in the neighborhood of $65 billion. It was discovered by U.S. Steel back in 1969 when they were looking for iron ore. There s a big iron ore belt up there, and they were drilling and they came across this very strange ore. It turns out it is a very large resource for PolyMetallic metals. And so, we ve done well on that one.

Once PolyMet has the permit they've applied for, they could be in production within nine months, and they would be producing 1.5 million in revenue a day out of that mill. That s a major story.

Now, another company in this area I like is Duluth Metals Limited. I recommended Duluth in December '06. I ve been covering the stock now for about 15 months, and we recommended it at 60 to 65 cents, somewhere in there, and it s hit as high as $3.85. Basically, Rick Sandry, who is a sharp mining guy with lots of experience, became president. I met with Rick one night at the Denver airport as he was flying through Denver, and he told me the story and I decided that I wanted to get involved. I recommended the stock. And his job basically was to put drill holes in between existing drill holes there to make this a 43 101 required resource.

Well, he not only did that, but he started stepping out, and he now has a much, much larger resource than we originally started with, and this is an amazing story. It s a big, big mineralization the same as NorthMet. This thing is worth a lot of money in in situ value.

One of the problems with Duluth, on the downside, is that it s close to what is called the Boundary Waters. The Boundary Waters is a very, very environmentally sensitive area that the State of Minnesota wants to protect and guard at all costs. Instead of an open pit like PolyMet can do down at NorthMet because they re much further removed from the Boundary Waters, and fortunately, the water table drains away from the Boundary Waters, not towards the Boundary Waters, Duluth would have to have an underground mine. They couldn t do an open pit, but the grades are higher, and the tonnage that they re getting looks like it s going to be much bigger than NorthMet's. So, can you imagine as big as NorthMet is, it looks as if Duluth could be even bigger and worth even more.

TGR: How about one speculative equity, Riverside Resources Inc. (TSX:RRI), then we'll wrap up?

MCCOACH: Riverside Resources is a different story than I normally get involved in, but in this business, like any business, it s all about the people. I never get into any project unless I trust the management team and look at their background. I always like to look for people who have at least 15 to 20 years experience working for one of the majors AngloGold, Barrick, Newmont, etc. When I see those kinds of people, that s someone you want to pay attention to. Well, the guy who s running this company, John Mark Staude, is a guy who has lots of background and experience, and has been involved with another discovery.

John Mark Staude is topnotch, and he decided, instead of working for a major, to go out and work on his own. At the time I got involved with him, we recommended this at 50 cents at the IPO stage. It has done well it hasn t even been a recommendation for a year I think, and it s at $1.10 to $1.15. It recently got a big endorsement from Rick Rule, who is, of course, one of the largest, most successful mining stock speculators in the business. Rick recently came in and took a big chunk, I think almost 10%, of the outstanding shares.

So, when you see someone like that getting involved, that s obviously another good plus, another good sign. They recently have started to put some projects into the portfolio. They ve got plenty of money. They re drilling one in Alaska called the Scheelite Dome Gold Property. It looks like they re having some success there, but more importantly they have a project in Mexico that recently got my attention.

It s a very good story, and I know John Mark is very excited about it, and it looks like they will get working on it. So, there are a low number of shares outstanding, a very tight share structure, money in the bank, and lots of good people to run the company. So, when you see a guy like that running the show, believe me, most of the money is going to go into the ground looking for a discovery, and he s committed to that. I like that story I will follow it. We re up right now.

I haven t sold any shares yet. Normally, I would take some money out. But this one looks so strong, and when I saw Rick get in, I thought, well, this looks like a triple I think I will wait for the triple before I sell 25% to 30%. You get a triple, you pay yourself 35%, you have your original money back. You let the rest see how high it can go.

TGR: Greg, this has been great. Thanks for all your input.

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