Resource Stock Update - V14 #11.2 - Markets, Shopping List - Nov., 24, 2008

PO Box 1020  Owen Sound, Ontario, Canada   N4K 6H6

resource@bmts.com     Yearly subscription $199 cdn/year or US$179

                                Very Positive Action

I hope many of you picked up Hecla last week around $1.25, at $2.00 today!!!

I have been talking about the October low and November retest and low and how I expect precious
metals and PM stocks to be the go to investment and an expected bear market rally in general
equities.

Finally - we seen some very positive developments today and Friday that go a long way in proving my expectations.

Gold has been the best performing asset with new highs in most currencies and the smallest loss
among other US$ based assets. I talked about the gold bottom around $700 in October and the retest
just a week ago and same with the gold stocks. Gold has now broke it's downtrend and we have seen
the first higher high as gold broke above $770 on Friday going above October/November rally high.
Today the gold stocks measured by the HUI, XAU and TSX Gold index etc. are breaking above their last rally high in early November. Assuming they finish up on the day, we will see the higher high.

This is the best positive news we have seen so far in this market blood bath. The market - although slowly, is responding to low prices and a market for undervalued assets. But it will take some time,
meaning months before it will show as a decent recovery.

The senior gold stocks have seen some large gaps upward and I expect there is plenty of short
covering taking place as well. It will not be far off before we see the mid tier and advanced
juniors starting to move higher also. Don't be surprised if you see some gaps up in price with these
too, and at anytime.

I want to also point out some market observations. It appears to me that gold was being held down by
considerable intervention. For the last few weeks, almost on a daily basis, gold would go higher in
Asia And Europe only to get sold back down again on New York Comex. This is nothing new, but it was
more consistent than other times, practically every day for weeks on end. It is no surprise gold
gapped higher on Friday, the day after the November Comex futures expired. The shorts and
manipulation is getting tired and desperate, they are grasping to hang on one month to the next. We
can expect gold to come back down after this rally runs it's course and I expect there will be a
major battle between bulls and bears around the Comex December expiry on December 18th.

On Comex, total gold stocks are now 8,108,978 ounces and silver is 128,720,340 ounces. It will be
interesting to see how much these inventories get depleted in December.

Gold chart

I expect this rally in the short term could go to $850 - and $900 tops where there is considerable
resistance. Ultimately  we need to see gold go over $900 to signal a longer term reversal and
resumption of the long term bull trend. I expect this could happen in 1st qtr. 2009, but sooner
would not surprise me.

However, the gold stocks may never look back, because they will be moving up from extremely over
sold conditions. The HUI at 236 has moved up 57% from it's low at 150.

             HUI Gold Bugs Index chart

And how is our shopping list done?  You could have bought these between the price listed Oct. 20th
and the tradable low that occurred in the following few days after the 20th. The senior golds
(Kinross, Goldcorp) have now seen good moves, up about 65% or 70% and the mid tiers are starting to
move some and are still good buys. The silver producers have made a decent move too and are a buy or
buy on weakness. Most of the junior producers and advanced juniors have not moved much yet and are
good buys. The ones that have seen decent moves I have listed as buy on weakness

Oct. 20th List - all prices Canadian dollar unless marked

Stock/symbol                   Tradable
           Oct 20 Price              Low        Now   Rating
Yamana  YRI  $6.10             $4.75       $6.35  Buy
Goldcorp G $26.70             $19.00      $33.40  Hold
Kinross K  $14.00              $10.50      $18.50  Hold
Dundee DPM $3.30             $1.95       $1.75  Buy  2.25 financing
IAM Gold IMG $3.80            $3.25       $5.06  BW
Claude CRJ  $0.32              $0.30       $0.39  Buy
Couer CDE $0.90           US $0.50     US$0.62  Buy
First Majestic FR $1.40       $1.00       $1.60  BW
Pan American PAA $15.80  $12.90      $16.88  BW

Platinum Group PTM $1.00   $0.90    $1.70   Hold
Exeter XRC  $1.30               $1.20    $1.77   BW
Endeavour EDV  $4.40         $3.30    $1.90   Buy
Paramount PZG $0.58          $0.46    $0.39   Buy
Adina ADM $0.90                $0.80    $0.79   Buy
Orko OK $0.45                    $0.20    $0.50   BW

Added today to the list Nov 10th

NewGold NGD                  $1.20    $1.47   Buy
Eastmain                         $0.55    $0.69   Buy
Coral Gold                        $0.11    $0.16   Buy
Eastern Platinum ELR       $0.33    $0.23   Buy

Added Nov 19th

Hecla  HL                        $1.25   $2.00    Buy

There continues to be more signs that foreign investment will shun the U.S. for a long time and
maybe forever. The spreads keep getting wider as yields on Fannie and Freddie’s $1.7 trillion
taxpayer debt rose to records. The difference between Fannie’s yield and 5-year Treasury bills of
the same maturity rose 11.5 bps to a record 164.9 bps. It gets worse daily and the sellers are
mostly foreign governments. Why would they sell bonds guaranteed by the U.S. government? I can only
conclude that maybe they do not have faith in the government’s guarantee and/or US$.

This is very bearish for the US$ and the short term spike in the US$ as a result of de-leveraging
has about runs it's course.

US$ chart

It is also very bullish to note that gold is making this move, despite the US$ still maintaining
itself near its highs.

According to Bob Chapman's news letter - "In the first ten odd months of 2008, the US Mint produced
648,500 ounces of gold eagle coins and 16,875,000 ounces of silver eagles. In 1904 they produced 15
times the current rate, which proves the mint is either incompetent or there is a shortage of gold."

I suspect that the limitation of gold and silver coins by the mint has to do with a shortage, or
they are just trying to slow demand by rationing.

Gold and silver will be the place to be in the next few years and will be leading the market rally.
This is already easy to see with the gold indexes up 50% from their lows, far out performing any
other sector. Gold and silver have started to show that they are decoupling from the markets, as the
forced liquidation by funds is easing. Many funds that were forced to sell will want to rebuild
their precious metal portfolios when the markets turn.

(c) Copyright 2008, Struther's Resource Stock Report

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