March 26, 2008

Lero Gold hit a new high of 95 cents today

Likely for two reasons:

1.) Anticipation of the company�s first resource calculation at their Taldybulak gold copper deposit in Central Asia.

2.) That this management team is selling their other company, Oriel Resources, for $1.5 billion cash. Investors see Lero Gold as their next focus.

In a February press release Lero gave the dimensions of the mineralized area of this large porphyry deposit, and the grades of some of the holes. I guessed at an average grade of 0.8 g/t Au from the release, and with some simple back of the napkin math came up with a potential resource greater than 10 million ounces of gold.

That�s a good place to start, but at the end of the day, Lero only has 30% of the deposit. Gold Fields International (GFI) has optioned 70%. Now, 3 million potential ounces is still very, very good � especially when they are basically free. GFI must take the project to feasibility to earn that � which on an asset like Taldybulak would probably run $50 million.

The Lero management team is headed up by Dr. Sergey Kurzin, a Russian born PhD in nuclear physics who has lived in London UK for 20 years. Dr. Kurzin has become one of the most powerful figures in mining in Central Asia in the last 10 years. He was a key figure in developing the Julietta Mine in Russia and selling it to Bema Gold. He obtained the Kupol deposit for Bema. He was instrumental in getting the uranium mines for UrAsia Energy in 2005 � UrAsia went from $1.50 - $8 a share in 18 months and was bought by Uranium One.

Now look at Oriel Resources (ORL-TSXV), Dr. Kurzin�s last �other� public company. Today they announced a $1.5 billion take-over bid from an NYSE metals producer called Mechel, which has $4 billion in revenues.

The reason for this pre-emptive bid by Mechel is that Oriel�s chrome project, Voskhod, located in Kazakhstan, is about to go into production and the cash flows should be enormous very quickly . This is a very opportunistic bid, but that�s another story. Our story is that the key shareholders around Dr. Kurzin are about to get $1.5 billion cash, and Lero Gold is their only other public company.

See Reuters story on the buyout here - Posted at www.mineweb.com

One other key point about Oriel � Kurzin went searching for, found, negotiated, bought, developed, financed and will have put Voskhod into production in under four years. Most new mines have 10 year timelines from discovery to production. He surrounds himself with very strong technical people, pays well and creates a lot of shareholder value quickly.

Dr. Kurzin is clear he has big plans for Lero. Aside from their Taldybulak porphyry, they have a copper project in eastern Kazakhstan, right near the Chinese border, that drilling to dates shows over 3% copper. He is already talking about getting it into production quickly, at low capital cost (whatever that means in this market) and he doesn�t even have a feasibility yet. But he is on the move.

He has hired a new President, Alexander Yakubchuk, a Russian who has a PhD in geology and has worked for 10 years with western major gold companies like Gold Fields International and BHP Billiton. He can bridge the culture gap.

So this team is now running hard on Lero. They are focused, they have plans, and they have a world class asset to lead off the story. Things could get interesting here. I am long 25,000 shares, and watching with interest.

Gord Zelko, Publisher

www.mineralstox.com

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