J Taylor s WWW.MININGSTOCKS.COM D o w J o n e s / G o l d A n n u a l R e t u r n s 8 0 % Gold Percentage Gains/(Loss) 6 0 % 4 0 % 2 0 % 0 % D J IA % G o ld % - 2 0 % - 4 0 % 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 Y e a r s 1 9 6 8-1 9 9 6 Energy & Tech Stocks Weekly Hotline Message (Now in our 30 th Year) July 13, 2012 Stock Pick of the Week Renaissance Gold Inc. Business: Gold and silver project generator with projects in Nevada, Utah, Argentina, and Spain Traded TSX: REN USOTC: RNSGF Initial Recommendation 12/3/10: $1.72 Price 7/13/12: $0.65 Shares Outstanding: 30.7 Million Market Cap: $20 Million Working Capital 12/31/11: $8.4 Million Silver Resource: 11.6 million Oz. Progress Rating (1) : A3 Telephone Number: 775-337-1545 Web Site: www.rengold.com (1) Composed of 12,019,000 oxide tons grading 0.54 opt silver and 8,408,000 tons grading 1.27 opt silver. When it comes to the exploration sector, companies applying the project generator model provide the best risk/ reward tradeoff, especially in markets like the current one when high-risk speculative capital is so very hard to come by. We have not talked much about Renaissance Gold (RenGold) since we first recommended this stock. And its performance for us has been abysmal to say the least. We recommended it toward the end of 2010 and it has fallen by 62% since then, despite the fact that things are going very well for this management team; it s had one major success under its belt over the last few years, that being with the predecessor company, AuEx Ventures. A successful Nevada gold discovery known as Long Canyon was spun off into Fronteer Gold, with AuEx shareholders receiving shares in Fronteer Gold. RenGold then evolved as the holder of all the remaining properties previously held by AuEx Ventures. The same management that made the Long Canyon discovery remains at Renaissance Gold and, in my view, the odds are quite good that at least one of the remaining 30+ projects in Nevada, Utah, Spain, and Argentina will be successful. Perhaps one of the most likely projects to start producing cash flow may be the Trinity Silver Mine, where Liberty Silver is required to take the project to a feasibility study to gain a 70% interest, leaving Renaissance with a 30% carried interest. An 11.6-million-ounce NI 43-101 silver resource has been established at this former silver mine where drilling is continuing. With positive results being announced, a significantly larger resource should be
2 announced hopefully by the end of this year. There is also evidence that the existing leach pads contain a significant amount of silver as well, and at some point, those leach pads will no doubt be drilled. It is my understanding that 16 of 18 drill hole assay results announced this past week, being outside of the existing resource, a significant increase in the resource should be forthcoming with a new calculation. In fact, management believes there is a good chance that this property could host a very large silver deposit. But it won t have to be a huge deposit to add significant value to this company s current miniscule market cap. The oxides leach very well. Previous recoveries were around 70% over a very short period of time. With operations discontinued at a time when the silver price was just too low to make money, a significant amount of silver is believed to remain on the leach pads. The Trinity Silver Property is just one of 30 or more properties that Renaissance holds in its portfolio and there are quite a few others that have the potential to evolve into something big. One of many properties that management is very excited about is the Arabia target in Nevada. This is a closely spaced vein system where high-grade values have been identified. The idea here is that it could have the potential for an open-pit operation, given the closely spaced veins. At this point in time, management is holding a 100% interest in the project. It is currently trenching these surface veins. If the values come in strong, that might allow the company to strike a deal where they get a larger percentage of the project when funding it with a joint venture partner s funds. Current joint venture partners and their projects are displayed below. Notice names like Agnico-Eagle, Sumitomo, and Newmont Mining. These guys are not playing in a project unless their geologists think a target has a chance to be world class in size. A percentage of a world-class project for a small cap company like Renaissance can quickly turn into world-class profits for its shareholders. On your left is a recent list of the company s current joint venture partners, along with a list of planned expenditures on each prospect. The next several paragraphs provide a quick summary of some of the Renaissance prospects as reported in a July 12, 2012 press release from the company: Great basin projects, Nevada and Utah Arabia is an orogenic gold system with a mining history. RenGold controls a significant land position, including staked lode claims and purchased patented mining claims. Detailed geologic mapping and directed structural mapping to locate mineralized shoots have generated several drill targets. RenGold is
3 conducting and financing a trenching program to further quantify persistent gold and silver numbers at surface that will start next week. Big Gossan is a dominantly copper system with some gold. The mineralized gossan is adjacent to a skarn with a buried magnetic low that trends northwest for 1.5 kilometres and runs into an old copper mine with the same trend. This is a recent agreement (see press release dated June 11, 2012) financed by Summit Mining Exploration Inc., a U.S. subsidiary of Sumitomo Corp. Goldstar is an orogenic gold system that is being advanced by Cassini Resources Ltd. Surface samples include up to 19 grams per tonne gold in tourmalinized aplite and quartz stockworks. Currently, the property is being mapped and is undergoing a detailed ground magnetic survey. Trenching and possibly an induced polarization survey are planned before drilling, possibly later this year. Leonid is a Carlin-style system south of the Railroad gold project owned by Gold Standard Ventures Corp. Leonid is also being explored and financed by Cassini. Mapping has just been completed, and a sampling program designed for more detailed rock chips is planned. A 2,400-sample soil survey has just been completed, and samples have been sent to the lab for assay. Additionally, a gravity survey has been contracted to start in late July. Some initial stratigraphic holes may be drilled by the end of the year. Pasco Canyon is the third project under agreement to Cassini. Pasco Canyon is an epithermal system located on the east side of the Toquima range in proximity to Round Mountain, Gold Hill and Northumberland. Cassini started a drill program on July 9, 2012, of at least two 1,500-foot diamond core holes. If the first two holes yield encouraging results, Cassini plans to continue with two additional 2,000- foot holes. Reef is a gold exploration project adjacent to Midway Gold Corp.'s Pan project, Nevada. Reef is operated by Golden Dory Resources Corp. and is advancing with further drill target consideration. RoseMine, operated by Navaho Gold Pty. Ltd. of Brisbane, Australia, is being considered for further drilling. Targets include multiounce silver results and a disseminated gold system associated with jasperoids. Spruce Mountain, financed by Summit Mining Exploration, will be drilled in late August, testing a variety of targets for base metals, silver and gold. The current plan is to drill about 5,500 feet of reverse circulation, 4,000 feet of mud rotary and 7,000 feet of core. Trinity Silver is operated by Liberty Silver Corp. On July 11, 2012, the company released the results of 18 new drill holes that are largely outside of the National Instrument 43-101 resource area. All 18 holes had reportable intercepts. Continued work will focus on getting a small deposit into production, with plenty of targets available to continue the resource growth. Wildcat is operated by Newmont Mining, which is planning to drill almost 10,000 feet of RC. The targets are high-grade-gold-bearing jasperoids with values up to three ounces per ton at the surface. The gold targets are in favourable Cambrian to Ordovician carbonate stratigraphy. Wood Hills South, southwest across the valley from the Pequop gold district, is operated by NuLegacy Gold Corp., which is planning a second round of holes later in the year. This drilling is focused on a follow-up to WHS11-007, which intersected an oxidized 10.7-metre (35 feet) interval from 83.8 to 94.5 metres downhole that averaged 0.4 g/t (0.012 ounce per ton) Au. The mineralized interval was within an approximately 60-metre (197 feet) zone of anomalous Carlin-style pathfinder elements and gold.
4 Additionally, this hole is adjacent to an elongate gravity low that is a prime drill target. NuLegacy is planning six holes for 6,000 feet of drilling for the early fall of 2012. In addition, new projects are being generated that will be added to RenGold's available joint venture opportunities and begin to be marketed for exploration agreements in the near future. Spain Baza is advancing in geologic concept with the recent recognition of hydrothermal breccias associated with the high-grade copper-gold siderite-albite veins. A just-completed structural study demonstrates that processed magnetic survey data can be used directly to define drill targets on concealed structures related to known mineralization. Recent challenges with government filing regulations have been resolved with the help of supportive local and regional governments, with the result that the land package is being consolidated, which will significantly facilitate future exploration work. Santa Cruz province, Argentina A recent letter of intent has been signed with Atala Resource Corp. to advance exploration of the Meridiano and Covadonga projects. Financing by Agnico-Eagle Mines Ltd. for the Gertrudis and El Monte projects is continuing. Data from a four-kilometer trenching program at El Monte are being compiled at present, and drilling is expected to start in the fall. Chile A regional exploration program is under way in northern Chile. A Chilean subsidiary is being organized to hold any mineral projects acquired, and fieldwork will begin in the last quarter of 2012. SUMMARY I believe this company has any number of promising exploration projects that could turn this stock into a ten-bagger. The company s burn rate is about $3 million annually. It has more than $7 million in the till now. Using other people s money to explore numerous projects lowers risk of dilution and enhances probability of one or more major discoveries. An updated resource number on the Trinity Silver Mine followed by a PEA during the first quarter of 2013, combined with prospects of early open-pit heap-leaching production on that mine could get this stock started on an upward trajectory by year end. Or it could happen earlier if some good drill results are forthcoming on any number of other properties. I like the idea that this company has a mix of major gold mining firms who are there because they see the prospects of making a major discovery. From a selfish, survival-of-the-fittest perspective, I like the idea of smaller companies as partners too, because many of them will go away because of an inability to raise capital, leaving Renaissance with valuable drill data and a reclamation of a 100% interest in their properties. I m also pleased that Doug Casey s International Speculator came out with a buy recommendation on this stock. According to Stockwatch, Louis believes the Wood Hills South Prospect, is the most exciting prospect in the company s portfolio. There are good reasons to think Louis may be right, but the point is, there are a lot of very exciting properties in the portfolio.
5 Most of all, I like the management of this company, which in the end is always the number one consideration you have to make when you invest in a company s shares. I can tell you that this past week as I reviewed this company, which I recommended back in 2010, I doubled my own holdings in this stock and I am also happy to see that Let me just say this in closing. I usually suggest limiting allocation to 5% of your portfolio at time of purchase to guard against wishful thinking and to practice the discipline of diversification. But with project generators, you are in fact buying portfolio diversification. If you are confident in the management, as I am with Renaissance, then in my view allocating a larger portion of one s portfolio to this firm and other prospect/ project generators makes good sense. J Taylor s Gold, Energy & Tech Stocks (JTGETS), is published monthly as a copyright publication of Taylor Hard Money Advisors, Inc. (THMA), Tel.: (718) 457-1426. Website: www.miningstocks.com. THMA provides investment ideas solely on a paid subscription basis. Companies are selected for presentation in JTGTS strictly on their merits as perceived by THMA. No fee is charged to the company for inclusion. The currency used in this publication is the U.S. dollar unless otherwise noted. The material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. The information contained herein is based on sources, which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available information. Any opinions expressed are subject to change without notice. The editor, his family and associates and THMA are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein. No statement or expression of any opinions contained in this report constitutes an offer to buy or sell the shares of the company mentioned above. Under copyright law, and upon their request companies mentioned in JTGETS, from time to time pay THMA a fee of $500 per page for the right to reprint articles that are otherwise restricted solely for the benefit of paid subscribers to JTGETS. To Subscribe to J Taylor s Gold, Energy & Tech Stocks Visit: http://www.miningstocks.com/select/gold Receive J Taylor s Gold, Energy & Tech Stocks monthly newsletter and weekly email messages for the period of your choice (U.S. and Canada). For foreign postal delivery contact us at email below. Return to: PO Box 778555, Maspeth, NY 11378, USA. Phone or Fax: 718-457-1426, E-mail: questions@miningstocks.com. (Make Check Payable in US$ to Taylor Hard Money Advisors, Inc.) Please Select Subscription: 2 Years US$360.00 1 Year US$198.00 3-Months US$69.00 Name Address City State/Prov. Zip/Postal Code Telephone Fax Primary E-mail: Secondary E-Mail: Card Number Signature Check Visa MasterCard Discover Exp. 3-digit Code (Last 3 digits of the number found on the back of your credit card, below your signature)