Struther's Resource Stock Report    -  V9 # 8.0      -  July 03, 2003

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                                           Market Cycles

As you probably know, I am a big believer in long term cycles and trends.

These are very important and can make a world of difference with your investment success if you are
on the right side of these long term cycles.

There are various types of cycles in different markets (stocks, bonds, economy, commodities) that
have different characteristics and various durations from short term (months to a year or two) and
very long term, lasting several decades.

You have probably heard of Elliott Wave theory that attempts to predict short and long term cycles.

You may have heard of the Kondratieff cycle. This is a 60 to 70 year cycle divided into four
seasons, Spring, Summer, Fall and Winter. This cycle comes from a study done by Nikolai Kondratieff
who was a Russian economist.

There is economic cycles, booms and busts/recessions

Credit cycles where interest rates rise in fall over short and long term cycles. We have seen an
approximate 20 year bull cycle in bonds as interest rates have been falling since 1982.

For example, the following is an excellent chart that shows the credit cycles and the Dow Jones to Gold ratio over the long term. The chart is from an article written by Tocqueville Asset Management called
'Gold For Dummies?' It is an excellent article on gold an the current economic/market cycle. I encourage you to read it at:

http://www.tocqueville.com/brainstorms/brainstorms.php?id=136

I have written about and you have probably heard the term a lot, secular bear market or secular bull
market. The word secular simply means cycle.

   ******************** Short Cycles Unpredictable

What I have discovered over the years is that none of the short term cycle theories are very
reliable or those that follow them.

For this newsletter I am going to use some information you can find in a ground-breaking book by
Michael Alexander called Stock Cycles. His book was written over January to March of 2000 and the
theory has accurately described the markets since then.

Alexander's book is only $14.95. The last chapters on the innovation cycle alone are worth the
price. What I have here is just a few brief comments from this book and I suggest you read it. You
can get the book at http://my.net-link.net/~malexan/STOCK_CYCLES.htm or from Amazon.com. If you buy
the book directly from Alexander's publisher (iUniverse.com) he gets more money and deserves it.

Alexander's work shows that using past stock market cycles to predict the performance of the stock market one year from now is pretty much random or about a 50/50 chance of the market going up or down, using price movements alone to make your prediction.  Even in the years which comprise secular bear market cycles, the market goes up 50% of the time, and often quite substantially.

Strange enough, most investors focus all their time and effort on the short term, they look for
short term gains and predictions while these have the highest odds of failure.

   **************  Very long term cycles of little use

Very long term cycles (30 to 100 years) are interesting and can be useful if you understand where
you are in that cycle, but most of us will not be investors that long. The other problem, it is very
easy to be off several years with your timing on these long cycles and that could have dramatic
effects. You have to understand the fundamentals driving these cycles and how they can alter the
timing. Imagine if you were shorting the stock market from 1996 to 2000 because your long term
market theory predicted the peak in the mid 1990s.

  *************** Long term cycles is where we should focus

But there are certain long term cycles which I categorize as 8 to 20 years that are not random, and
the probabilities of those repeating are very high. As you would expect, the patterns and techniques
of successful investing changes somewhat dramatically from pattern to pattern and cycle to cycle.
The trick, of course, is to figure out where you are in the cycle.

It is this type and length of cycle that we as investors need to focus on.

You have heard many things about the stock market, like stocks always go up in the long term.

But what is the long term?

Do investors realize that stocks can, and do go down for periods of 10, 15 and 20 years. I think
many would say that this is long term.

It is very important to note that the market has always cycled back and forth between bull and bear cycles. There have been 7 secular bear markets and 7 secular bull markets since 1802. These are
periods of at least 8 and up to 20 years where stocks are either generally rising or falling over
the entire period.

If you were in the stock market during the 95 years of the bear market cycles, you only achieved a
0.3% annual average rate of return.

One of the major problems with the stocks always go up crowd is there calculation is severely
flawed. Depending on whose numbers and what time period and whether you discount inflation or not,
the stock market has historically returned 6% to 10% a year over the long term. However,
historically the stock market has averaged a 4.6% dividend return that has been a big part of that
6% or 10% number. Take away the 4.6% from the 6% and the remaining 1.4% is not so attractive. Why
would I take away 4.6%? That is because the stock market only has about a 1% dividend yield right
now. So maybe I should have only subtracted 3.6%, but the point is without the higher dividend yield
your long term stock market return would be a lot lower. Currently with only a 1% yield and slow
economic growth, we should not expect historic returns over the next several years.

In his third chapter, Alexander looks at the historical cycle of bull and bear markets. First, he
points out that stocks have returned about 6.8% per year in real returns (adjusted for inflation)
over the last 200 years, but about 4.6% or two-thirds have come from dividends. The remainder
corresponds to the real annual growth in GDP over that time.

   ************** Short term gains for losers

Mutual Funds, newsletters, investors all look short term and want short term gains. However,
numerous studies prove that over 90% of day trading accounts and market timing programs fail.

Everyone strives for performance in the short term when in reality the odds are stacked against you.
The short term is very random and nobody has continued success over short term periods.

I know those of you reading this newsletter and other newsletters want instant gratification.
Everyone wants to buy that stock and see it go up a few weeks or couple months later. I put a lot of
effort into getting the right timing with my stock picks, trying to pick them just before I expect
they will rise in price. However, when I look at my record it is pretty much random. Sure I have my
streaks and pick 7 or 8 in a row that go up almost immediately and than I have some slow periods as
well.

The past several months have not been too bad as most of my tech picks seen large gains within a few
months, but the resource side has not been near as good. My last 3 energy stocks went up right away,
ENE, SCH and SC but most of the mining/gold stocks have done very little in the last several months.

Investors need to ignore the short term and focus on a long term strategy based on the current long term stock cycle.

   ************ Long term Cycles most important

In the last several decades there has been 3 or 4 stock market cycles with each cycle lasting 16 to
20 years alternating between a secular bull and a secular bear market. We just finished the last
secular bull market that ran from 1982 to 2000.

According to Alexander's book where he takes a purely statistical view of the stock market, looking
for repeating patterns. For his purposes, a period where the stock market out-performs money market
funds is good and where it under-performs is bad. Is there any pattern?

It turns out the only statistically valid non-random cycle he can find is a 13 year cycle. Since
1800, there have been 15 alternating good and bad cycles of 13 years, from stocks being undervalued
to being overvalued and back again. There was one period where the pattern instead of reversing,
continued for an additional (and exact) 13 years. 2000 was a 13 year peak in his model. There is a
probability of only 3.9% that this pattern is random.

Simply based on this statistical model, Alexander concludes that there is a 75% chance of a negative
capital gains return for index fund investors over the next 20 years. However, returns in any one
year period are essentially random.

Since Alexander compares to money market yields, this is pretty scary when you look at their very
low yields. However, I can easily see this if inflation heats up in the next several years, it is
typically not good for the stock market but yields in money market funds would see a dramatic
increase.

   ********** Don't earnings, drive the price of  stocks?

Real (inflation-adjusted) earnings growth for the period 1965-1982 was roughly the same as for
1982-1999. Yet we all know that the S&P 500 had significantly different results. The first period
was one of no stock price growth, and the latter saw growth of over 1000%.

What was the difference? Clearly, it was how investors perceived the relative value of the earnings.
In a period of high inflation, earnings growth of 6-7% is not all that impressive.  In today's low
inflation environment it is.

    ********** The long term wins out

We need to focus on the long term, the 13 or 16-20 year cycle and invest accordingly. We use
portfolio weightings that are matched for that cycle and adjust the allocations somewhat as we
fluctuate through the short term movements. Just like we had a 30% weighting in techs, went down to
10%, back to 20% and now down to 10% again.

It is ironic that I offer a 3 month free trial to the newsletter but am focused on a long term
strategy. In a 3 month period you may not see any change in our model portfolio weightings. You may
not see any profits neither, but I have consistently outperformed the market by a wide margin in the
long term and about 90% of the time on a yearly basis. I attribute this to keeping a long term focus
and having patience when the short term is moving against us. For example the model portfolio did
not beat the market in 1999 as we were a little early with our bearish strategy, but we made up big
time for this in 2000 by holding the long term focus. We are accumulating junior gold stocks and
have not made much money for many months, but will be sitting pretty when investors are jumping all
over these at 3 and 4 times their current price.

Sure I pick stocks looking for quick gains, but these are with a long term strategy in mind. I spend
a lot of time and strive to get that short term performance but I am focusing more on their longer
term potential. I know it is pretty random to pick short term gains, but if I focus on the long term
I know that sooner or later that stock has a very good chance of being a winner.

   ******************** Where are we now?

Right now, we are still in a secular bear market, but we are experiencing a bull cycle within the
longer secular bear cycle.

Low interest rates, a lower US$, dividend and capital gains tax cuts are creating optimism for the
economy and pushing this bull cycle. As Richard Bernstein, Merrill Lynch's chief strategist put it,
Its almost as if political and monetary authorities are conspiring to lift the stock market.

According to research by Ned Davis Research in Venice Florida, bull cycles within a secular bear
market do not last long. They looked at 17 and found on average the S&P 500 went up 50.6% and lasted
371 days on average. Some of these were in the last secular bear between 1966 and 1982 when the
market went up for 2 years. The secular bear market in Japan began in 1989 and since then there have
been four rallies of 48%, 34%, 56% and 62% that also lasted many months. The current rally could go
on a while longer as the S&P is up about 28% from its low. Ned Davis also found that most of the
rallies since 2000 and in Japan were led by speculative growth stocks. This means that the Nasdaq
which is made of more speculative growth stocks could actually double while the S&P goes up 50%

I believe that resources and medical stocks will be the place to be in this secular bear, they will
have a secular bull market. Resources have recently ended their long term secular bear market that ran about 20 years. I will have evidence on this in the next few months on my piece on the commodity
cycle. However you can see from the chart below that the CRB index has been in a secular bear market
with short term bull cycles since 1980 until the double bottom of 1999/2001.

                                                 25 year crb chart

Back to the stock market, the current bull cycle within the secular bear may have already run its
course, but I suspect it has not. Looking at the sentiment indicators, Investor intelligence, VIX
etc. everyone is too bullish so we do need a correction in the market, but I believe the last bottom
will not be taken out on this next down move, the market will hold above it and rally into the year
end. This will give us our first up year in the market in four years, it might not be much but it
will be trumpeted as the end of the bear market. However, most investors will be surprised and will
lose a lot of money as the bear market resumes once this mini bull cycle runs its course.

The low yield in treasuries and bonds could force money into stocks to sustain this rally further,
but high yield dividend stocks may be the ones that take over the lead in this bull cycle.

We are already making adjustments by selling a lot of our tech stocks and moving into a new sector
of dividend based blue chips. While the market is going to be choppy for several months or a year or
so, these types of stocks should perform well and we can earn 5 or 6% or whatever the case may be
while we wait for capital gains. A long term focus will be required.

********** Infation or deflation

The majority of my dividend based blue chips will be in the resource sector. This should come as no
surprise because a 20 year secular bear with these stocks has created one of the few sectors with
good value.

Another bonus of this strategy is we don't have to know the outcome of the current
deflation/inflation debate. If we end up with deflation, a safe high dividend yield among falling
interest rates will be attractive, bringing in buyers at higher prices and if inflation ignites
again these same stocks will benefit from higher commodity prices.

  ************ There will always be more Innovation Cycles

But there is another Innovation Cycle coming in our future. There will be another opportunity to get
in at the beginning of a new industry which will change the world as profoundly as electricity,
computers or the telephone.

The trick is we do not yet know what it is. Smart minds guess that it will be in the area of
nanotechnology or biotech. It could be fusion power or a new type of propulsion system for cars
(alternate energy). Or it could be something that is simply not on anyone's radar screen at the
moment. Perhaps resources, especially if Greenspan succeeds in triggering more inflation than
intended.

The world is changing ever more rapidly. Knowledge is compounding at faster and faster rates. We
must always be prepared to change and adjust our investment portfolios.

I hope you will journey with me and this newsletter over these long term cycles. Identifying them
and being on the right side will be key to your investment success. Don't be disappointed with short
term fluctuations that move against a longer term strategy, chasing short term trends and looking
for short term gains is destined to failure.

I have commented many times on the poor track record of traders, with over 90 percent losing money. Last October I cited the example from a newsletter by Roger Schreiner, who tracks 639 market-timing programs. Just 56 of the 639 market timing programs show positive returns, or less than 9 percent. Actual studies of day trading accounts show similar results and these include periods during the bull market in the late 1990s.

Short term trading looks good in hindsight and technical analysis makes it tempting, but most find
out during the implementation process that it is very difficult to succeed.

I have provided my track record over the last 4 years that illustrates how a long term strategy
provides consistent returns and some very good ones at times.

    
              ************ Track Record ****************

Year   Model     Resource  Tech    Nasdaq  S&P 500  TSE 300  TSE Gold  Gold
         Portfolio   Stocks    Stocks  Index      Index       Index        Index

1999    16.6%    18.6%   33.9%    87.8%    18.4%   25.6%    -23.6%      -2.8%
2000    14.9%    14.0%    8.7%    -39.3%    -9.3%    6.2%     -10.9%      -2.5%
2001    28.6%    19.3%    6.7%   - 21.0%   -13.1%   -14%      16.9%      -1.8%
2002    45.0%    90.1%    1.0%   -31.6%    -20.2%   -14%        31%       25.1%

The Model portfolio (weightings in stocks bonds cash and my newsletter picks) has provided constant and decent gains. Although we did not beat the market in 1999, I was a little early in preparing for a change in market cycles. We bought bonds and a bear fund too soon, but we more than made up for itin the long term over the next 3 years.

Resources stocks have been a tough sled until lately, we did manage to make good gains beating the
market by a wide margin and did exceptionaly well last year with a big move in our gold picks (up an
average of 156%).

It has been tough to make money in tech stocks and anyone who says otherwise is a liar. We have been
very light in this sector, moving our weighting from 30% in 1999 to 10% in 2000. We managed positive
gains by playing the short term bear market rallies, just like we sold off a number of tech picks in
the last few weeks.

The percentage gain in the tech and resource stocks is an average of all the stocks on our list for
that year. It is just an average, some people will do better than the average and others not as good
as the average.

I could go on and hype all the stocks I picked that seen big gains of several 100% like you see in
many newsletter advertisements, but this is not realistic and sets the wrong expectations (big short
term gains). Sure I have my share but it is the long term approach and consistent gains that makes
money in the end.

                         ******************************************************

The next stock I am adding to Struther's Mighty Millennium Index and the RSR list is

Newmont Mining,  NY:NEM  TSX:NMC    Recent Price C$44.50, US$33.50
52 week trading range  C$33.32 to $48

I am adding Newmont, not because of a high dividend yield, but because Newmont will be the leading
large cap gold stock, the blue chip among the gold producers. It's the Big American Gold Stock.
Americans are very patriotic and when they buy gold they're going to buy Newmont. The chart below
also shows that Newmont was performing very well in the last gold rally.

That is because they have solved their hedging problem that I was concerned with last year. They
will be essentially unhedged by the end of the year and have very little hedge left at this time.
Newmont took on the big bullion banks and is winning in terms of getting the hedge off at Yandal, by
offering the bullion banks a take or leave 50 cents on the dollar offer to close out the hedges.

Gold hedges about gone

On June 3rd Newmont's  subsidiary,  Yandal  Bond  Company  Limited (YBCL),  has accepted assignments
from six of a total of seven gold hedge counterparties for all their gold hedge contracts with
Newmont's  Australian  subsidiary, Newmont  Yandal  Operations Limited (Yandal), formerly Great
Central Mines Ltd., for a total cash payment of $77-million.

The total cash payment represents 50 cents  for each $1 of net mark-to-market  hedge  liability, as
calculated by YBCL as of May 22, 2003. These assignments represent 94 per cent of the ounces in the
Yandal  hedge book and 76 per cent of the negative mark-to-market liability of the Yandal hedge
book. Yandal remains obligated to deliver to YBCL for  the  contracts assigned under the offer.

As of today, Newmont has put Yandal into insolvency proceedings and has extended the deadline to
July 11th for the remaining hedge position to tender to the previous offer. One way or the other,
Newmonts hedge position will be closed soon.

Large gold reserves

Besides that, they've got a huge reserve base. Their excellent exploration  results meant replacing
depletion of more  than  nine million  ounces, resulting in year-end 2002 proven and probable gold
reserves of 86.9 million ounces. Newmont is always very active with exploration to replace and grow
reserves. At the end of the first quarter, there were  92  drill  rigs  in  operation around  the
world.

Their market cap is about US$13.5 billion and this values their gold reserves valued at $155/oz

Financial results improving

The higher gold price, increased production, stream lining operations after amalgamation and
eliminating gold hedges will all add together for a stronger financial performance

With gold prices improving, Newmont had full year net income in 2002 of $154 million or $0.42/share
with 4th qtr. net income tripling.

Newmont recorded 2002 net income applicable to common shares  of $154.3-million   (42  cents  per
share),  compared  with  a  net loss  of $54.1-million (28 cents per share) in 2001. For the fourth
quarter of 2002, Newmont earned $75.1-million (19 cents per share), compared with net income of
$18.4-million (10 cents per share)  for the  fourth  quarter  of  2001.

Performance highlights for 2002 included:

equity gold sales of 7.6 million ounces at total cash  costs  of  $189 per ounce;

net cash provided by operating activities of $670.3-million;

net debt to total capitalization ratio reduced by more than half to 20 per cent;

First qtr. 2003 improving too

On May 7th Newmont announced  first  quarter  net  income  of $117.3-million   (29  cents  per
share),  compared  with  a  net loss  of $8.7-million (three cents per share) for the first  quarter
of  2002.  Net income  before  the  cumulative  effect of a change in accounting principle totaled
$151.8-million (38  cents  per  share). First  quarter  highlights included:

equity gold sales of 1.78 million ounces at total cash costs  of  $201 per ounce;

net  cash  provided  by  operating  activities  of  $186.1-million, before settlement of derivatives
of $50.1-million;

consideration of $180-million received from the sale  of  the  TVX Newmont Americas joint venture
interest;

exchange of  the  company's  45.7-per-cent  interest  in  Echo  Bay for  a 13.8-per-cent  interest
in  Kinross  Gold,  which  had  a market value of $266.4-million at the end of the first quarter;

debt reduction of $156.7-million;

The company's improved performance was the result of a $59 per ounce higher realized  gold  price
(+20  per cent) and a 22-per-cent increase in equity gold sold over the year ago quarter (taking
into account the Feb. 15, 2002, acquisition  date  of  Franco-Nevada and Normandy).

Summary

We sold Newmont last year around $45 so we are essentially getting back into the stock around the
same price, but this time around we are doing so with less risk because Newmont has solved their
hedging issue. They have also streamlined operations after the amalgamation with Franco Nevada and
Normandy. The gold price is now in a higher range, financials are improving and Newmont has the best
management in the gold business.

The stock is selling at a premium to the other major gold producers and I expect it will maintain
that premium and perhaps improve on it. Based on the value of gold reserves Newmont is valued at
approximately US$155/ounce which is quite a bit more compared to the other North American majors
that are hedged, Placer and Barrick. GoldFields is valued at $75/oz and typically the South African
gold stocks have always sold at a discount compared to the North American gold stocks

Newmont $155/oz
Barrick     $116/oz
Placer       $95/oz
GoldFields   $75/oz

Newmont Mining Corporation,  USA Telephone: (303) 863-7414

Newmont Mining Corporation of Canada  Telephone: (416) 480-6480

Website  - http://www.newmont.com

<A HREF="http://chart.canada-stockwatch.com/sw/chart.dbm?symbol=nmc">Chart</a>

The other stock I am adding to the Struther's Millennium Index is a forestry stock. You have
probably heard a lot about forestry or wood product companies, especially in Canada because they
have taken a pounding between low lumber prices, a punishing U.S. duty on exports and a rising
Canadian dollar these stocks have been hammered. However that gives rise to a bottom fish
opportunity.

I am picking Canfor Corporation

TSX: CFP       Recent Price $8.70
52 week trading range $6.83 to $11.50

Shares outstanding 81.1 million

There are several reasons why I am picking this stock. They are the top Canadian lumber producer and
pay a decent dividend, just over a 3% yield. Management appears to be very strong and despite the
horrible market conditions the company was still able to produce a profit in 2002 and pay a
dividend. Their debt is US$ based so this gives them some advantage compared to other forest
companies in regards to the rising Canadian dollar. While a rising Canadian dollar hurts their US
revenue stream and raises the price competitiveness it reduces their US $ interest expense. The
stock is down near its lows and is selling at a discount to book value which is about $10.30 per
share

About Forestry Markets from Canfor's Annual report

Lumber market conditions were positive for the first half of 2002, but deteriorated steadily during
the second half of the year. Prices for North American 2"x 4" Random Length (RL) averaged US $264
per thousand board feet (Mfbm) in the first half of the year, which was considerably higher than the
average price in the fourth quarter of 2001. Although demand for lumber remained relatively strong
throughout 2002, an abundance of supply kept average prices low. Prices declined sharply, to an
average of US $209/Mfbm, during the second half of the year. The average 2"x 4" price for all of
2002 was US $237/Mfbm, which is 6% below the previous year’s average of US $251/Mfbm.

On May 22, 2002, the US imposed countervailing (CVD) and anti-dumping (ADD) duties of 18.79% and
8.43%, respectively, on Canadian lumber shipments to the US. Canfor was assessed a specific ADD rate
of 5.96% based on its product shipment profile during the period of review, which resulted in a
total duty of 24.75%. The imposition of these duties significantly reduced the competitiveness of
Canadian lumber producers relative to other US suppliers. In order to remain competitive and
maintain market share, Canadian SPF (spruce-pine-fir) lumber producers reduced operating costs by
operating their sawmills at much higher levels and for longer time periods than in 2001. As a
result, total Canadian SPF production increased by 10%, or 2 billion board feet, over 2001, when
production levels were significantly lower than normal because most mills took extensive curtailment
in response to the market conditions at the time.

The impact of low mortgage rates and relatively strong consumer confidence in 2002 caused US housing
starts to be at their highest level since 1986, which resulted in high demand for lumber during the
year. Single-family housing starts, at 1.36 million, were 6.8% higher than in 2001 and total housing
starts, at 1.7 million, were up by 6.4%. The US South, a major user of SPF lumber and the region
that builds the highest number of houses, recorded the greatest increase in housing starts over
2001. Other areas of consumption were also strong, such as lumber used in home repairs and
remodeling, which rose by approximately 4% over 2001.

Nothing much has changed in 2003 except a stronger Canadian dollar has hurt the Canadian lumber
export market with stronger U.S. competition and reducing Canadian dollar based revenues.

It appears the U.S. Canadian lumber dispute is moving towards some kind of resolution so this would
be a positive factor for 2003 and beyond.

About Canfor Corp

Canfor Corporation is a leading integrated forest products company based in Vancouver, British
Columbia. The majority of Canfor’s woodlands operations and manufacturing facilities are in British
Columbia and Alberta. The company is the largest producer of softwood lumber and one of the largest
market pulp producers in Canada. Canfor also produces kraft paper, plywood, remanufactured lumber
products, hardboard paneling and a range of specialized wood products, including baled fibre and
fibre mat. Howe Sound Pulp and Paper Limited Partnership, owned equally by Canfor and Oji Paper
Ltd., produces kraft pulp and newsprint. The main operating company is Canadian Forest Products
Ltd., from which the name Canfor is derived.

The 6,290 people directly and indirectly employed at Canfor, work in woodlands operations and
manufacturing facilities in British Columbia, Alberta, Quebec and Washington State. It is here where
the employees produce quality lumber products for the largest home centres in North America,
specialty paper to global customers and reinforcement pulp for the world's largest paper makers.

Commitment to the environment has been a part of Canfor's corporate culture since the company's
inception. Today, Canfor is a leader in forestland certification. All of its forestlands
Environmental Management Systems (EMS) are certified to the ISO 14001 standard and approximately 1.7
million hectares are certified to the Canadian Standards Association Sustainable Forest Management
standard. Canfor's manufacturing facilities operate to the same high standard. The company's pulp
and paper facilities are certified to both the ISO 9001 and 14001 standards. One sawmill is
certified to the ISO 14001 standard.

SALES

$2.11 billion in 2002
$1.99 billion in 2001

MARKETING

Canfor, through its Canfor Wood Products Marketing operation, sells its lumber throughout North
America and overseas. Canfor’s northern bleached softwood kraft pulp and kraft papers are sold in
world markets by the Canfor Pulp and Paper Marketing operation. About 70% of the lumber is exported
to the U.S. and about 22% remains in Canada. The remainder is exported to Europe and Asia, mainly
Asia where Canfor is experiencing good growth for their products.

WOOD PRODUCTS MANUFACTURING

• Canfor operates 11 sawmills in the northern interior of British Columbia and two in Alberta with
and annual production capacity 3.0 billion feet of lumber.

• Canfor operates two finger-joint plants; one in the Prince George region and one in Grande
Prairie, Alberta.

• One lumber remanufacturing facility with a capacity of 160 million board feet is operated by the
company’s U.S. subsidiary, Canfor U.S.A. and Canfor also participates in a joint venture
remanufacturing facility, Kyahwood Forest Products, in Moricetown, British Columbia.

• Two chipping facilities operated in Prince George are capable of producing 325,000 oven-dried
tonnes of chips annually.

• Canfor’s Panel and Fibre operation, located in New Westminster, produces a variety of embossed
hardwood panels, as well as wood fibre products from residual wood.

• Canfor runs a plywood plant in Prince George with an annual capacity of 174,300 msf (3/8") of
plywood.

• Lumber and plywood pressure treating are carried out at the PG Wood Treating Plant.

PULP AND PAPER MANUFACTURING

• Canfor operates two pulp mills and one pulp and paper mill in Prince George which have the
capacity to produce over one million tonnes annually of high quality northern softwood kraft pulp
and 134,000 tonnes of kraft paper.

• In addition, Canfor owns 50% of Howe Sound Pulp and Paper Limited Partnership located on the
Sunshine Coast, which produces 348,000 tonnes of northern softwood kraft pulp and 208,200 tonnes of
newsprint per year.

A new ranking of Canada's top 30 lumber producers published jointly in the March issue of forest
magazine Logging and Sawmilling Journal and Wood Markets newsletter shows Canfor's lumber production
totalled 2.81 billion board feet, easily giving it top spot.

"This huge 550-million-board-feet increase for Canfor comes despite a punishing countervail and duty
of 27 per cent on exports of Canadian lumber to the United States," said Russell Taylor of wood
products consulting firm R. E. Taylor & Associates Ltd, which researched and assembled the list, and
publishes Wood Markets. "This production gives Canfor a leading position in a fragmented market --
it essentially means one out of every 10 pieces of lumber in Canada is produced at a Canfor
sawmill." This is the fourth year in a row Canfor has been Canada's largest lumber producer.

Late in 2002, Canfor announced a far-reaching plan to further improve their permanent operating
income base by at least $150 million and is now being implemented. Costs are being reduced in all
areas with the most dramatic changes occurring in operations. Mills are being rationalized so that
we will have fewer mills operating on a virtually continuous basis, employing skilled personnel, the
most current technology and modern process controls. The recently announced closure of one sawmill
near Prince George and one in Taylor, B.C. were part of this plan. Decisions to complete the sawmill
optimization program in the Prince George Region, Houston, as well as the Peace Region of B.C. and
Alberta are scheduled to be taken before the end of July.

Financial

The softwood lumber dispute has a significant impact on Canfor’s results and when this is resolved
it will be at least some relief to significant relief depending on the final outcome. During 2002,
Canfor paid $105 million in cash duties and $9 million in related legal fees in regards to this
dispute.

Canfor has been able to maintain good cash flow levels

Cash generated from (used in) 2002    2001 Operating activities $ 144.4 $ 118.8

Long-term debt $ 643.4

Canfor's debt to equity ratio is just over 0.90, higher than I would like to see but not a big
problem since the ratio is affected by the low share price, they have good cash flow levels, the
company is well managed and significant cost improvements are being initiated.

The dividend is yielding just over 3% and it only amounts to a payout of $21.1 million per year.
Given Canfor's cash flow and their ability to still make a profit the dividend still appears safe
under these poor conditions in the lumber market.

At the end of 2002 Canfor had working capital of $273.2 million Total assets of 2,328.0 million

Summary

Lumber and pulp account for 75% of Canfor's revenues and they endured the lowest prices in over a
decade for both major product lines. Add the punishing effects of 25% duties on lumber sold into the
US market, with Canfor carrying the largest share of the burden of any Canadian forest products
company, and you have the makings of a very bad situation.

But Canfor's management handled the situation very well, shutting some mills and running others at
full capacity by adding a 3rd shift. In 2002, third shifts were introduced at the company’s Fort St.
James and Rustad sawmills and a third shift was negotiated for the Fort. St. John facility. This
move was seen as creating stable jobs at the sawmills while generating the most efficient output
from the mill asset. Third shifts were already in place at Isle Pierre and Polar operations.

An $11 million profit in 2002 may not be exciting but it was a remarkable achievement by Canfor
under the circumstances. They reduced costs aggressively, set production and productivity records
and they held their market share in the face of extreme adversity. They have initiated further cost
reduction measures and the company appears to be on track and well managed to maintain their
position of Canada's number one lumber producer.

I believe we are at the bottom or near the bottom and looking up. Things could not get much worse
than they have been in the lumber market and Canfor's stock price like other lumber companies is
beaten up. This provides and opportunity to buy a leading forestry stock at a cheap price and paying
a decent dividend. I expect higher dividends and capital gains with this stock in the years ahead.

The stock peaked at $25 in 1994 and then went into a bear market with a bottom below $5 in early
1999, the stock then moved up to almost $20 in 2000 and then moved down to its recent low around $7
in late 2002. The chart shows us that there is good support in the $7 to $8 range but it is
uncertain if the latest bear move in the stock since early 2000 is over. The stock has moved above
its 200 day moving average but it has done so several time in the past few years without sustaining
an upward move. A move above $10 would be very positive and a close above $12 would be a very good sign of a new bull move in the stock.

We should get a position now in the stock, trying to pick it up on weakness towards $8.50 and we can
add to this position if the stock sees a significant down move.

Web site - http://www.canfor.com

<A HREF="http://chart.canada-stockwatch.com/sw/chart.dbm?symbol=cfp">Chart</a>

                ************************** UPDATES ***********************

Good news on Black Hawk Mining

Glencairn, Black Hawk Mining to melt into one another

Black Hawk  TSX: BHK,  OTC: BHKMF             Recent Price $C0.15
Entry Price $0.11                      Opinion - buy

I was looking into Glencairn, because on June 24th Glencairn Gold announced that it engaged
Endeavour Financial Ltd. to provide assistance in arranging financing for its Bellavista project in
Costa Rica and to finance acquisitions. Things have already started to happen and this is very good
news that Endeavour will be behind the new Black Hawk.

To find out more about Glencairn Gold Corporation (TSX-V:GLJ), visit their website at
www.glencairngold.com.

Details of June 30th news release

GLENCAIRN, BLACK HAWK COMBINATION TO CREATE CENTRAL-AMERICAN GOLD PRODUCER WITH GROWTH POTENTIAL

Glencairn Gold and Black  Hawk  Mining  have  agreed  to  combine  the two companies  on the basis
of one share of Glencairn for every three shares of Black Hawk.

Under  the  terms  of  the  proposed  combination,  Glencairn  will issue approximately   47,285,029
common  shares  to  Black  Hawk shareholders. Glencairn currently has 21,084,167 common shares
outstanding. The  combined company  will  operate  under the name Glencairn Gold Corp. and the
current officers of Glencairn will continue  as  the  management  of  the  combined entity.

"The   combination   of   these   two   companies   creates    a strong, Central-American-focused
gold mining company with a producing mine, another project ready to build and an excellent portfolio
of exploration  targets," said  Kerry  Knoll,  president  and  chief executive officer of Glencairn.
"Black Hawk's Limon mine in Nicaragua will give  Glencairn  immediate  cash flow,  and  our
Bellavista project in Costa Rica will add to that when it begins operating."

"This is a positive development for Black Hawk  shareholders,"  said Garth MacRae,  president of
Black Hawk. "The management group at Glencairn has an excellent track record and will provide
leadership in developing the  Black Hawk assets along with the Bellavista property."

Completion of the transaction is subject to certain  conditions including, among  other  things,
completion  of  due  diligence  by each  party, the execution  of  a  definitive  agreement,  and
receipt  of  all  regulatory approvals and third party approvals and consents, including approval by
the shareholders of each company and the approval of the Toronto Stock Exchange and  the TSX Venture
Exchange. Subject to the fulfilment of all conditions, the transaction is expected to be completed
in the third quarter of 2003.

Description of key assets

Black Hawk's Limon mine is expected to produce 53,000  ounces  of gold  in 2002,  increasing to
60,000 ounces in 2004 and 67,000 ounces in 2005, at an average cash cost per ounce of $207 (U.S.)
over the three  years.  None  of its  current  or  future  production is subject to forward sales or
hedging commitments.

Limon has been in continuous operation since 1941, producing  nearly three million  ounces  at  an
average  grade of more than nine grams of gold per tonne.  The  underground  mining  operation
feeds  a 1,000-tonne-per-day carbon-in-pulp  milling  facility  constructed in 1995. At the end of
2002, Black Hawk reported 973,600 tonnes of proven and probable reserves  with  a grade of 6.2 grams
per tonne containing 194,000 ounces of gold. For further details of Black Hawk's mineral reserves
and resources, please refer to the Black  Hawk annual information form in Stockwatch SEDAR files
dated May 30, 2003.

Glencairn owns a 100-per-cent interest in the Bellavista  gold project  in Costa Rica, where it
plans to begin construction of an open-pit, heap-leach gold mine once financing is arranged.
Construction costs at Bellavista  are estimated  at $27-million (U.S.), not including working
capital. Based on a feasibility study completed in 1999 by the previous  owner,  Bellavista  is
projected to  produce  an average of 60,000 ounces of gold per year over a mine life of 7.3 years at
a cash operating cost,  including  royalties,  of $163 (U.S.) per ounce upon commencement of
commercial production. All major permits necessary to begin construction have  been  obtained. For
further details  of  Glencairn's  Bellevista  gold  project  and its  reserves and resources, please
refer  to  the  Glencairn  annual information  form  in Stockwatch SEDAR files dated May 16, 2003.

Both Limon and Bellavista offer excellent exploration opportunities. In the fall  of  2003, a
diamond drill program will commence in the Sta. Rosa-Uval area, located three kilometres south of
the Limon mill.

     COMBINED RESERVES AND RESOURCES
           As at DEC. 31, 2002

                               Contained
Category                       ounces

Total Proven and
probable reserves                748,972

Resources

Total measured plus
indicated                        819,747

Total inferred                   872,200

               ********************************************

The merger will give the company more depth with higher production once the Bellavista  gold project
in Costa Rica comes on stream. This will make Glencairn and over 100,000 oz/year producer. The share
structure will also be better because in effect 2/3 of the number of Black Hawk shares outstanding
will be absorbed in the 1 for 3 merger.

This will give Glencairn about 68.4 million shares outstanding. Glencairn is now trading around
C$0.50 which we be a market cap of $34.2 million post merger or about US$25 million. This values the
post merger gold reserves at only US$33/ounce. Gold reserves plus indicated resources (748,972 +
819,747) are only valued about $16/ounce. This is a low valuation for a gold producer and when you
consider that Black Hawk is trading at C$0.15 or C$0.45 post merger it is even a better buy.

Angela Cooper    Phone 416 363-2911  FAX 416-363-3330

A HREF="http://www.bhkmining.com"    E-mail info@bhkmining.com

<A HREF="http://chart.canada-stockwatch.com/sw/chart.dbm?symbol=bhk">Chart</a>

Pan American Silver  TSX: PAA, Nasdaq: PAAS           Recent Price C$9.25
Entry Price $11.75                    Opinion - buy on weakness

We have a position in PAA from buying Corner Bay pre merger. We originally bought Corner Bay at
$C0.70 so we made a huge profit. I suggested buying BAY again at C$5.20 last June and this meant we
ended up with Pan American at a value of $13.50, but this also included part of a warrant that
allows us to buy one share of Pan American at US$12 anytime in the next 5 years. The warrants
started trading this year around $3.50 and the value of the warrant of our total cost is $1.75 so I
have listed the entry price of Pan American at (13.50 - 1.75) $11.75 and since we only received half
as many warrants as shares after the merger, our warrant entry price is $3.50.

It has been a while since I updated Pan American, but this week

PAN AMERICAN SILVER COMPLETES LA COLORADA EXPANSION AHEAD OF  SCHEDULE AND UNDER BUDGET

All figures are in U.S. dollars unless otherwise stated.

Pan American Silver has substantially completed a major expansion at its La Colorada  silver  mine
in Mexico. The expansion is expected to increase the mine's annual silver production from 700,000 to
3.8 million  ounces  at  a cash cost of $2.65 per ounce. The $20-million expansion was completed
ahead of schedule and 5 per cent under budget.

The expansion included the construction of a 600-tonne-per-day  oxide mill added to the existing
200-tonne-per-day sulphide mill. Commissioning of the new mill has been in progress for several
weeks, and production is expected to  reach  design  capacity over the next few months. With more
than 90 per cent of its revenues derived from silver, La Colorada is one of the  purest silver mines
in the world.

The stock looks like it is in a slight uptrend but is still near the bottom of its 3 year range
between $8 and $13.50. The stock is a decent buy here, especially on weakness around $9 or US$6.75.

Rosie Moore 604-684-1175 remoore@ibm.net
Website http://www.panamericansilver.com

<A HREF="http://chart.canada-stockwatch.com/sw/chart.dbm?symbol=paa">Chart</a>

(c) Copyright 2003, Struther's Resource Stock Report

All forecasts and recommendations are based on opinion. Markets change direction with consensus
beliefs, which may change at any time and without notice. The author/publisher of this publication
has taken every precaution to provide the most accurate information possible. The information & data
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