Resource Stock Update - V14 #4.1, Markets, TUI.N, WND, PZG, ROH, ARU, NKE, Potash    - May, 1, 2008

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                                  Gold - Resource Markets

Well, April is over and I got through another tax season. It has kept me side tracked the past week,
but probably the most painful part was claiming and paying tax on the capital gains I made in early
2007 because they have been very hard to come by in the last several months. I am sure they will
come again and I could comment on many of our stocks that are down in price, however I am going to
present one chart that pretty much tells the story for most of them and also highlights the fact
that this is the time to buy, not sell.

The chart below is the Canadian Venture Exchange index and it is a very good representation of the
junior resource market. There is a few points that become obvious at first glance. First off, we can
see that the market has been in a pretty steep down turn (with a few upside corrections) since the
August meltdown in subprime/asset backed securities - the BCBS.

Secondly, we have been stuck in a trading range between 2,300 and 3,300 for about two and a half
years. That is a long time in a sideways market.

Third, we can see that the 2,300 area is a pretty solid bottom where we have bounced off and headed
back up four times in the past and will soon do it again for the fifth time.

Now granted, this paints a pretty dismal picture and the good news is - that is the past. What I see
as so positive and bullish is several factors. I have already pointed out in early April that
$XAU/$GOLD ratio went under 19. Since the bull market began in gold stocks in 2001 whenever it went
under .19 a major low in gold stocks has occurred.

We can see on this chart of junior resource stocks that we are within 3% or 4% of major support and
there is no sense waiting to get a little better bargain because we could just as easy turn higher
from here and the upside to the top of the range is 37%. This is a very good risk/reward ratio.

The junior resource stocks have been in this consolidation range for over 2 years. If you remember
last year I commented about the exact same thing with gold, that we were consolidating within a
range but would soon break higher and in September 2007, I predicted gold $900 by the end of the
year- we broke out of the range within weeks and I was off by just one week with the $900 price hit
in the first week of January 2008.

                                        Gold Weekly chart

These junior resource stocks have seen a huge consolidation, they too are like a compressed coiled
spring. You can also see on the above chart of the Venture Exchange that the volume has been at a
much higher level in this trading range. That is a very good sign of a strong consolidation and also
accumulation.

Another fact, the senior golds always lead the juniors and we can see by this next chart of the HUI
(gold bugs index) that the senior golds also seen a long period of consolidation in 2006 and 2007
and then broke to the upside. The XAU index has the same pattern.

                                                      HUI chart

I want to also point out that the seniors have also come down to an attractive buy level as pointed
out with the XAU/Gold ratio and on the chart we are at a major support area around 400 and just
below the 200 day moving average. Since the bull market started in gold stocks they have never
strayed too far below the 200 day moving average and if so only for a matter of a few weeks.

Another factor I want to make you aware of, the gold stocks tend to run up with the price of gold and fall
back when gold consolidates or corrects from recent highs. The gold stocks then run up again, about
3 to 6 months later when they start reporting much higher cash flow and profit numbers from the higher realized
gold prices. This is true of other commodity related stocks, like oil.

I have no doubt that both the senior and junior gold/resource stocks are headed much higher and soon
and we will see the Venture index at 4,000 before year end.

As I pointed out in an article I emailed you last week, it is only a matter of time before a lot
more buying and money comes into this sector. This recent sell off in a big way was caused by the
BCBS mess that has caused a liquidity crisis and many investors  had to sell what they could to
raise cash, meet margin calls and other obligations. Many Investors also preferred to liquidate
junior resource stocks because of their higher risk, anything with more risk caused more fear. This
has pretty well run its course and although I still expect to see the credit crisis continue, it
will be at a slow painful (more manageable) pace and the shock factor is now over.

When this money comes back into the sector there will be few choices. Retail investors will not like
paying $1000 for an ounce of gold and many will look at silver, but there is no silver left to buy.
I know that sounds shocking but is true and I will soon have a special report out on the situation
with silver - it is a powder keg. I also doubt they will buy a lot of the senior precious metals
stocks at $50 to $100, so most are going to turn to the mid tier and juniors. This is where the big
gains are going to come and is why we are positioned here.

Another positive aspect is we are seeing the beginning of mergers with the junior golds and ones we
hold, 3 companies with Peak gold and most recent Lero Gold and European Minerals, this will
continue. This creates less product to buy and with rising demand we will see a double whammy
pushing these stocks higher. The majors and mid tiers will also start buying up the juniors, because
they have little choice and even at much higher prices they will still be cheap relative to precious
metals prices.

To summarize, I see right now - as the best buying opportunity we have seen since we bought in at
the start of this bull market in 2001. At that time we seen huge gains of over 100% on the average
for our gold stocks and this is about to happen again.

                
                                         **************** Updates ************************

I am just going to comment briefly about a few of our stocks.

Although the junior resource market has been dismal, we have been doing very good in other areas.
The stocks I added to the Millennium Index have done well, except Pifzer PFE at $20.20 and it is a
good buy. Our Millennium index is up 10% on the year and yielding almost 7% in dividends, once again
beating the market by a long shot.

I am continuing with our plan to sell the energy trusts into strength and am going to sell True
Energy Trust - (TUI.N). The stock has moved from $3 to $4 on the back of some asset sales and at
$4.00 is yielding 12%, so there is no rush to sell, you could try to get $4.50 to $5 for the stock
while you collect dividends. I see $5 as a top because it is a major resistance area on the chart.

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

Western Wind - WND at $2.25 is a great buy, after running up to $3 it has come all the way back
down.

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

I have had a number of questions on Paramount - PZG it has come back to trade as of yesterday and at
$1.80 is an excellent buy.

Some have concerns by the length of the halt, but I was not surprised. I spoke with a couple other
companies that have dealt with the DTC in the past and they confirmed they are slow and really don't
care. The DTC is a government agency and a monopoly, they don't have to worry about competition,
they are the only game in town. To them Paramount is just a speck of sand on the beach. Paramount is
just a tiny micro cap company among the 10s of thousands of stocks that the DTC services. Anyway the
good news, this is done with and behind the company and has presented a bargain buying opportunity
along with factors giving a bargain in the whole sector.

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

Rochester - ROH our new oil sands play has been beaten up, I think this has to do with the general
market weakness and also the fact they did a $0.40 flow through financing that has become free
trading. A flow through is a tax right off, but at prices below $0.20 they would also be selling at
a loss. There has also been some management changes so I am wondering if out going directors sold
stock. I will have more of an update when I get some more info and see whether it is a great buy as
I suspect, for now hold positions.

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

Aurelian - ARU at $4.10 is well below our $5.80 entry price and we might as well just hold the
stock. I don't think it is worth buying, as basically everything is suspended in Ecuador for 6
months until they draft up new mining laws. After that I think we will just be looking to make a
profit here and move on. Most likely taxes and royalties etc. will prove there are better
jurisdictions to invest in, like Mexico.

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

Nike NKE, $66.70 if you shorted or bought Puts, The stock has started to head down, I will be
looking to see if it breaks below $65 as a signal it is headed much lower in the near term

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

That is it for now, but stay tuned for my update on the silver market, this is very important and I
am also doing an update on the special situation in the commodity market in general, I am calling it
Commodity Armageddon.

And you will be very happy to hear that I have a new Potash play coming up. This has been the
hottest sector in the resource market, just check put Potash Corp - POT recently the largest cap
company in Canada that has gone from $70 to $220 in the past year. The IPO of Interpid Potash IPI,
IPOs at $32 and jumps 50% the first day of trading.

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

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

Western Potash is another good one that will soon IPO www.westernpotash.com

But the problem - you just can't get much, if any stock in these, it all goes to institutions and
funds.

However check our Potash One - KCL it is a junior that has run from $0.75 to $5.00 in the last year.
This new junior that I have found that will soon come to market will have just as good properties
but stronger management, and we will be able to get in close to the bottom.

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

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

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