Resource Stock Update - V15 #6.4 - Markets, CMM, XRC  Mar. 25, 2009

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                                                           Markets

Last week seen some very interesting developments. The Swiss hammer their own currency to devalue it
and then the US Fed announced it is buying $300 billion in their own long term Treasury bonds.

As I have been commenting, at some point something has to give, either U.S. interest rates will have
to go a lot higher or the US$ a lot lower. Long term interest rates have been rising from their
October lows while the US$ has been stable. Although I expected rates to rise (bonds fall) I have
been reluctant to short bonds using ETFs because of this much talked about intervention in the bond
market.

Now it is a reality. The Fed wants to keep interest rates low and the dollar will be sacrificed and
is why I have taken the path to be short the dollar with the UDN power shares and go long gold.

                                            30 year Treasury Bond

We can see that the 30 year bonds reacted very positive to the Fed announcement, with a jump in
price (drop in interest rates), but it does not look like bond prices had fallen that far. They were
still way above their levels of just last November.

30 T Bond Yields

Not easy to see on this long term chart, but on a short term chart you  can easily see that the
30 year bond was recently yielding 3.57% about a month ago and today is yielding
3.64% so little change. Last week yields got as high about 3.8%, so the Feds action only resulted in
a drop in long term interest rates of about 0.10 to 0.15% points, not much. I don't think the Feds
action was so much an effort to ease further by lowering long term rates in so much as more of a
measure to try and stop rates in rising further.

In other words, bond investors are not willing to buy treasury bonds at these prices, they want to
see lower prices (higher yields). This is another way of saying that the Fed had to buy it's own
treasuries because nobody else will. Roll the printing presses!

Like I have said all along, something has to give, either interest rates go up on government debt or
the US$ falls and right now and in the foreseeable future it is obvious the Fed is going to let the
dollar fall.

The odds also look quite high that the drop in yields recently to 2% will be a long term bottom as
doubts increase about the U.S. Government credit as stimulus and deficits increase in the years
ahead.

                                              US$ Index chart 

You can see on this weekly chart of the US$ index, the dollar plunged last week and looks to at
least go down further to test the $0.80 level.

Since we bought the US$ Bear Power shares 'UDN' they have basically been going sideways around our
$25 entry price. They also jumped higher last week to $26 from $24.75 reflecting the US$ weakness. I
suggest that you continue to hold these and buy anytime under $25

                                        Comex Gold chart

The action in gold was also very interesting and violent. Before the Fed announcement last Thursday,
gold was off dramatically to about $880, testing the lower end of its support, then after the
announcement it turned right around to hit $950. It is quite obvious that the market had no idea
this news was coming, but the Fed and their agents did - and that is why gold was sold off and so weak
early in the day. In an effort to contain the gold price, it was much better if gold rallied off a
much lower price, so it was knocked down in the morning.

On the topic of market interventions, as far as I have seen this newsletter has been the only that
has commented on how the government intervention in July last year was a big mistake and caused the
meltdown, until I seen the Got Gold Report by Gene Arensberg last week that read:

"""“July Massacre,” as Donald Coxe, former Global Portfolio Strategist for BMO Capital Markets and
now head of Chicago based Coxe Advisors, LLC dubbed it. The July Massacre was when Coxe felt the
U.S. Treasury Department and the U.S. Federal Reserve decided to interfere in the markets for oil,
gas, gold and silver through an avalanche of selling in futures markets coordinated through a few
big U.S. banks in order to prop up an ailing U.S. dollar and cut the legs out from under the
overheated energy markets. If Coxe is right, that intervention more than anything else contributed
to the collapse of the financial markets as the confusion it caused completely destroyed some of the
largest (and most leveraged) commercial and investment bank traders and started a global derivatives
domino effect meltdown. Entire books will be written in the near future about all the unintended
consequences of that fateful period and the resultant global financial crisis of confidence of the
“panic of oh-eight.” """

Although without intervention the markets would have still gone down, it would have not been so
violent and probably so severe on every sector. What I am saying the market would have been more
selective on different sectors, as it had been up until July 2008.

                                        S&P 500 chart

The Feds move last week also seemed to give market traders a reason to buy stocks, whether right or
wrong, it sure looks to me that we are finally having our first bear market rally. From the S&P low
around 670, we are now at 803 which is about a 17% move higher. The major resistance is around 880
to 900, so a move to that level would be a 34% rally.

The move with the Canadian TSX is similar, up 18%

So basically we have potential for this bear rally to last a two or three months and add on another
15% or so. That is what I am looking for and is the best case scenario.

                                    *********************** UPDTATES **************************

A couple of our stocks seen significant news yesterday

Century Mining       TSXV:CMM                     Recent Price C$0.13
Entry Price - 0.085                                               Opinion - buy

Great news with Century yesterday. They did not complete their gold option financing but announced a
debt financing to put their Sigma-Lamaque mine into production

With debt there is no share dilution

Century will borrow $65-million (U.S.) for a term of seven years, at an interest rate of 8 per cent
in the first year, and 6 per cent per year in years two to seven. The interest for the first year of
the loan will be paid in full at the time of closing of this transaction. Payments in years two to
seven will be interest only, with a balloon payment at the end of the loan term for the entire
principal amount.

Regarding due diligence processes customary in financings of this scope, the lender has indicated
that the extensive due diligence carried out by Fortis Bank and the resulting January, 2009, due
diligence report are sufficient for the purposes of this transaction. This is significant because it
will expedite the closing of the debt financing. The company and the consortium anticipate
finalizing the underwriting on this debt financing in approximately 21 days, with financing of the
full amount to take place 30 to 45 days after that.

The stock moved up to $0.14 on the news and I expect it to move higher when the financing closes and
maybe before then. I would continue to hold the stock and buy it if you did not get a position
around 8 cents.

There is less risk, now that this fianacing deal is announced and it looks pretty certain to close
while the previous gold option financing was much more of a gamble on closing.

Brent Jones
Phone: (360) 332-4653
Toll free: (877) 284-6535

http://www.centurymining.com/

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

Exeter Resources         TSX:XRC,   NY:XRA                 Recent Price C$3.80
Entry Price C$0.64                                         Opinion - hold, take profits

I have been recommending XRC all through the market melt down because of the big potential of their
Caspiche project in Chile and with news yesterday it is up to 8.73 million ounces gold. The stock
has come a long way from its recent bottom around 1.25 to 1.50 and if you bought down there I would
take some profits. But hold a long term position, as the stock can go a lot higher, because this
deposit has more room to grow. It looks like near term it is headed back up to over $4.00 where it
was last June

Exeter released an interim National Instrument 43-101-compliant mineral resource estimate for
Caspiche, Chile. The estimate is based on data available to the end of 2008, leaving the deposit
open for expansion to the west, south and to depth. A second mineral resource estimate, using all of
the additional drilling data to the end of the season in May, is expected to be available in
September, 2009.

        CASPICHE INTERIM MINERAL RESOURCE ESTIMATE 2008/09 SEASON

Material    Category    Volume  Density  Tonnes  Gold Gold Copper   Copper
                                 (mm3)  (g/cm3)    (mt)      (g/t) (moz) (%)     (mlb)

Oxide       Inferred        30.8     2.4          74        0.55  1.30
Sulphide    Inferred     152.1    2.47        375.9     0.61  7.43  0.25  2,090.60
                                  -----    ----            -----         ----     ----  ----  --------
Total gold  Inferred      182.9   2.46        449.9      0.60  8.73

Chairman Yale Simpson commented:
"The near-surface oxide resource has been almost totally depleted in copper, making it potentially
amenable to heap leaching for gold, as is common industry practice for such deposits. The sulphide
material at depth would require a gold-copper flotation recovery path. Four internationally
recognized engineering groups and metallurgical laboratories are currently conducting metallurgical
testwork and infrastructure studies that will be included on our website when the reports become
available.

"Current drilling has added 4,500 metres of data to the interim resource database. It is important
to consider that some crucial assay data, including drill hole CSD032 with 1,214 metres at 0.9 gram
per tonne gold and 0.33 per cent copper (see news release dated Feb. 25, 2009) is yet to be factored
into a resource estimate. We believe the additional data from holes drilled outside the interim
resource shell will add significantly, both to the size and to the grade of the target deposit, as
shown by the section diagram below (please see the map reference included in this release).

"Following our recent financing, we can now extend drilling well beyond the current season. Our
budget to September, 2010, provides for a further $16-million in expenditures. The budget includes
drilling to further expand the resource and in-fill drilling of the high-grade area to indicated
resource status. Infrastructure and metallurgical studies are also within the budget."

Website    http://www.exeterresource.com

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

(c) Copyright 2009, Struther's Resource Stock Report

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