Throughout my association in the mining industry I have heard almost every story you can imagine. For instance, there is more gold in seawater than can be measured and some company is supposed to have some super technology that can extract it profitably.

Another one that pops up is, "Our gold does not assay by normal methods but believe me we have a lot of it and our super extraction process will make us all rich."

Then we can get into the idea that, "the tailings from the previous mine are worth a fortune just by themselves" . . . and on and on it goes.

One "story" that many investors have bought into, however, is the idea that open-pit mining is very cost effective. This of course is true to some extent, because to build an open-pit mine takes far less money than to build an equivalent underground mine. And although open pits work beautifully for copper and zinc, they seldom work for silver.

This week's missive is why silver open-pit mining may truly be the pits, and our members-only report features information of extreme significance to those of us who are serious about making money in the mining sector.

Your editor has been told time and time again that low-grade projects were economic (they make money for the shareholders) if just enough of "it" (the mineral or minerals in question) were found. In other words, "We might have a very low-grade project but we have so much that it lends itself to an open-pit mining operation, and we are all going to make lots of money."

This never really held much credence with me, knowing from my earliest studies that "grade was king" -- meaning that a high-grade operation would almost always trump a low-grade project. However, there are profitable open-pit mining operations throughout the world that are making money. This of course is dependent upon the price of the metal being mined, whether precious metal or base metal. Simply, what might look great at $1.00 per pound zinc might not be ore (ore is defined as economic) at half that price.

The idea of how to define what really constitutes a good project from one that really might just be promotions by a junior mining concern led me to seek out an answer. And through my many contacts in the industry, the answer came from a very well known geologist, who stated to me that a myth existed that "open-pit" silver mines could be profitable. This individual pointed out the facts that very few silver projects are profitable yet many base metals operations are -- but every mining operation is grade dependent.

To be perfectly blunt, if you hear, "We have two ounces of silver per ton and a gazillion ounces," be careful! Certainly it is possible, but our report this month will clarify the facts and dispel many myths about the costs of mining.

It is an honor to be,