Resource Stock Update - V13 #7.3, - Markets, Gold/silver, PGDP, ELR  March, 28, 2007

PO Box 1020  Owen Sound, Ontario, Canada   N4K 6H6
resource@bmts.com        Yearly subscription $185 cdn/year or US$149

Web Site  "http://www.playstocks.net"       Phone-519-374-9332

Lots of significant news on Paramount today and while I was away, also a breakout on the stock
price. Before I get to that some comments on the markets

The jury is still out on whether this will turn into a short term correction or is the beginning of
a larger correction or bear market. The chart is looking pretty sick with a fall back from a rally
attempt. However, there seems to be way too much pessimism in the market for this to be the start of
a serious correction or bear market. Too many market participants are anticipating this.

These are a few things I noticed last week from some market reports I follow

The New York Stock Exchange (NYSE), revealing a 9.5-percent jump in the shorted shares not yet
closed out on the NYSE. The monthly period measured for short interest stretched from February 15
through March 15, encompassing the pullback in the market. This is an off-the-charts increase in
short interest, these monthly short-interest changes tend to be in the one- to two-percent range.

A second sign of the growing pessimism on Wall Street comes from mutual fund investors. Recently,
the NAV–adjusted assets for the Rydex Nova fund has plunged to a more than three-year low as
investors have fled the mutual fund. The Nova fund is designed to have a target beta of 1.5. In
other words, using shares of equities, stock index futures contracts, and options on those
securities and futures, the fund has a target performance benchmark equal to 150 percent of the SPX.
The fund is a real good proxy for the market.

A final sentiment indicator that is pointing toward extremely heavy levels of pessimism is the
equity put/call open interest ratio, which measures put and call open interest across all equities
using their front three months of options. This ratio has soared to its highest level in more than
four years, as put positions have been added at a faster pace than call positions during the past
couple of weeks. In fact, this ratio is near the highs achieved in 2002 when the market was
searching for its ultimate bottom at the tail-end of a multi-year bear market. Some very bullish
contrarian implications in the fact that this major level of negativity was generated among equity
option players by a pullback this brief and this shallow.

In the short term, I doubt the market will get much weaker, but could be volatile within a trading
range.

The housing market and the U.S. economy is what will drive the market.

There was some news on housing that was taken as positive, but I don't see it that way and the jump
in sales volumes could just be a short term quirk in the numbers

Existing home sales rose by the biggest amount in nearly three years in February amid a sharp
increase in sales in the Northeast, the National Association of Realtors said. The 3.9 percent
increase was the largest since a similar jump in March 2004; analysts had been expecting a decrease.

Still, the report did have some downbeat aspects -- the median price of a home fell year-over-year
for the seventh straight month and inventories rose.

When you consider there is going to be a steady wave of foreclosures hitting the market as the
Adjusted Rate Mortgages come due, add to this about a 10% or more drop in demand because speculators have left the market and another drop in demand from the 2nd tier of buyers (those that put 5% down), the U.S. housing market is going to get much worse before it gets better.

How much this plays on the economy is the question

There is one thing that continues to go up and that is inflation. You can also see by this weekly
chart of the old CRB index, the commodity correction has run its course and is heading back up gain.
Oil prices have recovered, metals and uranium continue strong.

I also have a very strong feeling that we are very close to a major breakout and run up in the gold
and silver price.

While many comment on the old 1981 high for gold around $800, this was just a short term blip, and
if you use a long term monthly chart on gold, the current price has already broken above the 1981
high. Taking a look at this weekly gold chart, you can see that a new uptrend is established and we
should soon test the $700 high of last year

                                                             GOLD

The fundamentals are also very bullish. Gold has been rising in all currencies for almost 2 years
now and the central banks are losing control of the market. The recent news that IMF is changing
accounting practices on how central banks report their gold holdings is probably coming at a time
when it will not matter. By the time the changes are implemented, the CBs will have already lost
control of the gold market and when market players learn that much of their gold holdings were
actually loaned out and they can't get them back, it won't really matter. Don't be surprised if gold
is well north of $800 by then

You can find Resource Investor's report, "IMF Posts First Draft of Changes to Gold Loan Accounting,"
here:

http://www.resourceinvestor.com/pebble.asp?relid=30006

GFMS reports that it expects the gold dehedging figure to pick up in 2007 from its forecast at the
end of 2006. We've already seen about 3 million ounces dehedged in just the first quarter. GFMS now
tags the expected reductions at 7.5 million ounces in 2007.

I highlighted this to you once before and we seen a big gain in gold stocks. The XAU tail does not
wag the gold bullion dog. The Globe and Mail featured a technical analyst that says the XAU is a
“buy” when the gold-to XAU ratio crosses the 5.0 threshold as it did on last Tuesday’s close. When
reaching such a ratio in the past, the average one-year return for the XAU has been 40%. If you
think that’s interesting, consider that the analyst has found that the past 32 times with the ratio
at 5.0 there has been only one occasion when an investor lost money on the XAU with a one-year
horizon (the loss on that occasion was 12%). It may be that now that “everyone” knows this it will
cease to work but bullion drives the XAU and not the other way around.

Current Ratio = Gold 667 / XAU137.35 =  4.85

It will still be a long time before gold production rises. As gold companies merge, their production
has actually been declining. Another factor, with higher gold prices, companies are milling lower
grades which brings down production.

The South African Chamber of Mines reports the country’s gold production fell by 7.2% in 2006 to its
lowest level of production since 1922.

                                                                               SILVER

The weekly silver chart even looks better than gold. You can see that the uptrend is stronger and we
already seen a breakout to new highs in early March. Silver out performed gold in 2006 and I expect
it will do so again in 2007.

The number one silver stock you should hold in your portfolio is Paramount Gold - PGDP and number two is Palmarejo - PJO. I say Paramount as number one because they will get the added boost from being ealier on in a major discovery. Much of the rise in the stock is in the months ahead as they prove up a larger discovery.

However, both companies are in Mexico's Sierra Madre and that is the best place to be for a silver
company. Mexico is known for silver, is miner friendly and stocks in Mexico and in particular Sierra
Madre get the highest valuations.

Paramount Gold  OTC:PGDP,  Frankfurt:P6G        Recent Price US$3.10
Entry Price $1.00                                        Opinion - buy

The stock finally broke out of the trading range as I suspected, and now we can look forward to much
larger gains. By the way the stock moved up, I would think their major financing was over subscribed
and is completed. We will probably see news to that effect very soon, once the red tape is dealt
with.

Paramount announced that they have completed their 70% earn in at San Miguel and also announced a
very aggressive 50,000 meter drill program. This will mean lots of drill news and it is going to be
a very exciting year for this story and stock price. The company has good support from Lanye
drilling, remember,their COO Larry Segrestrom was a manager at Layne.

Another very important announcement is they hired two new consultants.

Mine Development Associates (MDA- www.mda.com) to perform the deposit modeling, resource
estimations, and National Instrument 43-101 reporting on San Miguel. MDA did all the work for
Palmarejo and is very familiar with the type of deposit Paramount has

Paramount has also engaged the services of Tony Starling of London, England to provide technical
consulting with respect to its San Miguel project. Mr. Starling is an expert structural geologist
and has a tremendous wealth of experience in the Sierra Madre region. I met Mr. Starling at the PDAC and he is simply one of the best in the business.

Working with these consultants well give a lot of confidence to the analysts and funds that are now
behind Paramount. I did hear that pretty much all the financing was institutional. More than likely,
the stock will soon fall under control of the institutions and will trade much stronger.

This will also be aided when the get their Canadian listing and off the OTC on to the Amex exchange. I expect this will happen within the next 2 - 3 months.

They also put out some more awesome drill news today. Hole SA-19 was excellent, with 61.9 meters
that averaged 184 g/t silver. That is about 6 ounces silver per ton. And the hole ended in strong
mineralization of 438 grams (14 ozs/ton). The hole seen some high grade hits over 1,000 grams. Here is some of the details from the news release

Drill hole SA-19 had numerous high grade intersects of silver, including 1.75 meters of 1,294 g/t
silver and 4.40 meters of 1,162 g/t silver. SA-19 intersected 61.9 meters that averaged 184 g/t
silver with 0.41% combined lead and zinc from 25.0 to 86.9 meters. The hole ended in strong
mineralization at 89.10 meters with a 0.90 meter intersect from 88.20 to 89.10 meters of 438 g/t
silver with 2.36% combined lead/zinc. SA-19 was drilled at a 55 degree angle, and with most drill
holes being drilled at 55 to 65 degrees, true widths are estimated to be 80% of reported drill core
lengths.

SA-17 intersected 4.3 meters (45.0 to 49.3) of 218 g/t silver and 7.0 meters (57.0 to 64.0) of 253
g/t silver. The best intersect for SA-16 was 3.0 meters (59.5 to 62.5) of 569 g/t silver.

Bill Reed, Exploration Manager for Mexico said, "The recent results in the San Antonio zone fill in
some of our previous wide spaced drill holes. Not only does it potentially expand our silver
resource, but it also gives us more confidence in the continuity of this zone. The mineralized zone
appears to widen out in the San Antonio area as witnessed by drill hole SA-19 that intersected 61.9
meters of strong silver mineralization and the hole was still in strong mineralization when it
ended."

I think the stock is still an excellent buy here on the technical break out, especially if you don't
own any or not too over weight. Definitely it is way too early for profits and we should continue to
hold and add to our positions

Investor Relations: Chris Halkai
Tel: 1-613-226-9881
Toll-free: 1-866-481-2233

Website - http://www.paramountgold.com

http://www.stockhouse.com/comp_info.asp?symbol=PGDP&table=LIST

Eastern Platinum    TSX:ELR                                  Recent Price C$2.04
Entry Price $1.47                                          Opinion - hold

Eastern Platinum (Eastplats) recently reached an agreement to acquire 42.39% of Gubevu Consortium
Investment Holdings, its Black Economic Empowerment (BEE) partner, which holds 26% of Barplats. The
shares will be purchased for ZAR43 million (C$6.9 million) plus settlement of Gubevu’s financial
obligations, which total ZAR197 million (C$26.8 million). In a separate transaction, Eastplats
agreed to buy back a 1% net smelter royalty on future Spitzkop production for US$6.5 million and 12
million shares in Eastplats. The company further secured its interest in Barplats against potential
changes to BEE legislation in the future by entering an option agreement with its BEE partner. These
transactions tighten Eastplats’ control over the Barplats assets and represent further steps towards
a simpler corporate structure. Ownership of Barplats has increased by 11% to 85%.

The company has attributable resources totalling 75 million ounces of PGMs but production this year
of just 110,000 ozs of total PGMs. Eastplats might be considered a buyout target, given the ongoing
consolidation process in the area, which is due in part to the higher expectation on future PGM
prices held by most corporates.

http://www.eastplats.com

http://www.stockhouse.com/comp_info.asp?symbol=ELR&table=LIST

Aurelain Resources   TSXV:ARU                   Recent Price C$31.80
Entry Price C$23.25                                Opinion - hold

It looks like the Ecuador scare is dissipating and focus is coming back to the huge potential of
Aurelian's Fruta Del Norte gold discovery. There was an important break out on the stock chart after
more spectacular drill results (250 meters of 35.18 g/t gold) were released on Tuesday. The down
trend line has been broken and the stock closed above its previous rally high in February. There is
considerable resistance between $33 and $36, so a break above that area would be very positive.

On Tuesday, Aurelian released results from four additional drill holes from the buried Fruta Del
Norte (FDN) epithermal gold-silver discovery on its wholly owned Condor project in southeastern
Ecuador. These include a 250-metre interval grading 35.18 grams per tonne gold (Au) and 27.1 g/t
silver (Ag) in drill hole CP-07-100 on line 3400N, and a 264-metre interval grading 5.40 g/t Au and
8.8 g/t Ag in drill hole CP-07-101 on line 3300N. These latest results demonstrate continued success
from the company's infill drilling program in support of an inferred resource estimate over a
portion of the deposit by mid-2007.

Tel: 416-868-9100

Web - http://www.aurelian.ca

http://www.stockhouse.com/comp_info.asp?symbol=ARU&table=LIST

(c) Copyright 2007, 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
were obtained from sources believed to be reliable, but because the information & data source are
beyond the author's control, no representation or guarantee is made that it is complete or accurate.
The reader accepts information on the condition that errors or omissions shall not be made the basis
for any claim, demand or cause for action. Because of the ever-changing nature of information &
statistics the author/publisher strongly encourages the reader to communicate directly with the
company and/or with their personal investment advisor to obtain up to date information. Past results
are not necessarily indicative of future results. Any statements non-factual in nature constitute
only current opinions, which are subject to change. The author/publisher may or may not have a
position in the securities and/or options relating thereto, & may make purchases and/or sales of
these securities relating thereto from time to time in the open market or otherwise. Neither the
information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock,
futures or options contract mentioned herein. The author/publisher of this letter is not a qualified
financial advisor & is not acting as such in this publication. Struther's Resource Stock Report is
not a registered financial advisory. Investors are advised to obtain the advice of a qualified
financial & investment advisor before entering any financial transaction.