A major objective of many investors active in the natural resources sector is to diversify away from the fiat-based world of finance and credit-dominated sectors such as banking, insurance and retail. These investors want exposure to hard assets, not soft ones. Today, they desperately hope that commodity prices will soon recover given the large losses just about every natural resource portfolio has incurred over the past few months, the last two in particular.

The fall in commodity prices has created an environment that has made it very challenging for natural resource companies—mining equities in particular—to obtain financing for exploration and project development. It seems cash, not metal in the ground, is king. How ironic that the one asset natural resource investors are trying to diversify away from—the U.S. dollar and its troubled competitors—is the very asset that mining equities need the most right now. It turns out that drilling contractors, engineers, geologists and miners all still prefer to be paid in paper money.

The story of Orvana [TSX: ORV.TO] (ORVMF.PK) is a fairly simple one to explain and understand. On April 30, 2003, Orvana completed construction of facilities at the Don Mario mine site at a cost of just $19 million. Mill start-up and commissioning took place in May and June of that same year, with commercial production beginning on July 1^st. While the Don Mario mill had an initial design capacity to process 600 tonnes of ore per day (tpd), throughput was quickly increased to 700tpd in October 2003. The mill produced 48,227 troy ounces of gold during the fiscal year ended September 30, 2004, and went on to produce 68,759 ounces and 80,028 ounces during fiscal 2005 and 2006 respectively. Management expects Don Mario to produce about 80,000 ounces during fiscal 2007.

The property owned by Metalline Mining (MMG) is located in Coahuila, Mexico in the Sierra Mojada Mining District. The district has high voltage electric power and is accessible by rail lines, a well-maintained gravel airstrip, and 250 kilometers of paved road.

Silver is rarer than gold. Period. There is less silver in the world, above ground than there is gold. That is easy to document. Since I have been harping on this point, no one has been able to refute it.

Even though there are five ounces of gold in the world now for every one ounce of silver, this 5 to 1 ratio will expand as newly mined gold is added to above ground supplies… This should get your juices flowing. It should drive you to buy silver… Silver is more rare than gold, and rarer still is someone who knows this fact. You should act accordingly.