Resource Stock Update - V15 #9.3 - MFL, PZG, Gold, US$, Bonds - May. 28, 2009

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Minefinders  TSX:MFL                   Recent Price - $C10.32
Entry Price $5.59                          Opinion - hold

Minefinder has done very well for us, now almost doubling since we bought in December. I like the
long term prospects as their Dolores project is just going into production. But short term it is
moving into major resistance in the $11 to $12 area and I also suggested buying the warrants for
more leverage.

We are up over 200% with the warrants in about 5 months, so I am selling the warrants and will keep
holding the stock.

Minefinder Warrants    TSX:MFL.WT        Recent Price - C$5.80
Entry Price $1.80              Opinion - sell at 5.80 or higher

Paramount    TSX/NY:PZG                        Recent Price - C$1.60
Entry Price C$0.60                               Opinion - buy back trades

Well it is about month end and right on cue, the stock is being sold down. As I reminder I commented
on the monthly pattern in my May 4th update. For traders I suggested selling the stock in the
C$1.70s - 1.80s or US$1.50s and buying back at month end.

The stock is being sold down today, so it looks like the month end weakness is now underway, perhaps
today through to Friday, you never know, often it firms up a couple days before the calendar month
end.

Anyway, I am trying to buy back in the C$1.50s, and may go higher if the stock does not drop down to
me.

In my May 4th update I speculated that there had to be fund selling and would watch filings. Sure
enough, it looks like Sprott Asset sold 3.3 million shares. There recent filing shows they own
700,000 and the last filing showed 4 million. I know Sprott has a very good relationship with the
Seabridge Group so am a bit surprised. Maybe the stock was moved into other funds and Sprott will
buy back. You never really know what these big players are up to.

I have also been speculating about shorting on the stock and sure enough this is confirmed as well.
In my update the reported short position on TSX was 151,400. By the May 15th report it had jumped to
359,000, which is still not that much considering the volume and amount of shares outstanding. As I
said before, I am certain once we see the naked short data, come August my suspicion of heavy naked
shorting will also be confirmed.

Regardless this is all short term fools play by shorts that are on the wrong side and get squeezed
harder each month. I am only too happy to play their game. We can sell some stock into mid month
strength and but it back cheaper when they bring it down for their month end books.

Is difficult to say where we will bottom at month end, it could be in the C$1.50s, or maybe today at
$1.60. If I can make $0.20 on my trades, I am not too worried at what price.

But looking at the chart, this month I used the TSX C$ chart, instead of the US$ price last time,
but same thing. I used the black lines that outline the consistent monthly pattern of the month end
sell off and subsequent rise by middle of the next month to new highs.

It seems the 30 day average, brown line has been good support on month end weakness, so that would
be about $1.50. And if we look at the Stochastic, it is down at levels where the bottom occurs. What
I do expect, we will see the bottom between today and Friday.

Of course this all assumes the monthly pattern continues.

I expect next week, or soon after a new drill program will be announced, maybe that will be the
catalyst for next months high.

I will also mention that this C$1.75 area or US$1.50 area is where I expected the first major
resistance. The next resistance if we break through this is US$2.00 or C$2.30, so perhaps that could
be next months target if we continue to higher highs.

Paramount 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=PGZ&table=LIST

                                         Gold

What could either derail PZGs rising pattern or help it, along with other gold stocks is the gold
price.

My comments yesterday, were that we may be at or near a short term peak. I speculated we would
either start correcting from last Friday's high, or we continue higher, but would need to breach
$965 to see the test of old highs over $1,000. Well today we went higher, but not to $965 yet, so I
will continue to watch that level.

In the short term the big influences on gold price are the US$ and bond market.

US$ chart

The US$ is dropping, just as expected, but as you see on this weekly chart we are now down around
$0.80 on the dollar index, the first major support area. This is the area that held late last year,
and stopped the first sell off back in late 2004 and until the sub prime crisis hit in 2007. The
weak dollar is also what is propelling the dollar price higher in other commodities like oil.

So I will also be watching the dollar chart as well for either a break below $0.80 or whether it
holds, that could be the deciding factor in the short term  gold price.

                                Bonds

No good news here either, bonds have kept edging lower all week and were down again today

http://www.bloomberg.com/markets/rates/index.html

The yield curve continues to steepen, now at about 4.4%

http://futures.tradingcharts.com/chart/NO/W

Looking at this future chart of the 10 year treasury, today we are just above $117. The breaking
point would probably be about 112. That would be giving back all the gains since the meltdown and
deflation fears. If bonds got to that level in this environment, you can bet the stock market will
already be much lower and gold higher.

But the US Government/Fed is going to fight and intervene all the way.

Don't kid yourself or let anyone convince you otherwise, the U.S. Gov/Treasury is using lots of
intervention in the bond, stock, currency and gold/commodity markets.

While their intervention in currencies is a well known process that has been going on for decades,
and so they have always influenced the bond market with their interest rate policy. They are now far
more active in currency and bond markets and it seems to be widely known and accepted. They are also
very active in the stock and gold market, although that is not as widely acknowledged yet.

Here is a piece from a recent CNN news item
http://money.cnn.com/2009/05/27/markets/bondcenter/credit/?postversion=2009052709

The government is selling debt at a breakneck pace while it is also steadily buying back debt $300
billion of its own debt as part of a program called " quantitative easing."

The idea is that as the government creates demand for its own debt, prices are supported and yields
fall. Tuesday, the Fed bought $1.6 billion in TIPS, or Treasury inflation Protected Securities.
Wednesday, the government bought $6 billion in debt that matures between May 2012 and August 2013.

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

I think quantitative easing is also another word for intervention. Basically they are trying t
influence the market as best they can as they peddle off as much debt as they can to all the suckers
buying it.

The weakness in bonds and strength in oil, and other commodities could be two fold. First, China has
begun a legitimate turnaround. In fact, some analysts see a “V”-shaped bottom forming.

However, while that's great for the Chinese, it doesn't do much good in N. America. If rising demand
from China drives oil prices higher, the effect resembles a tax hike for the American consumer. Any
benefit from Chinese growth, will probably be minimal compared to the cost of higher interest rates
and energy prices.

Secondly, pushing bond yields and energy higher is the unprecedented increase in the U.S. monetary
base – the sheer ocean of liquidity being poured into the financial system. Investors, who realize
that the value of an asset often comes from its limited supply, are growing nervous about currencies
in general.

Put yourself in the shoes of a foreign investor. Which would you choose to own – a currency that is
being printed faster than any other in history, or an asset that is rare and difficult to produce?
No wonder investors are demanding bigger yields from T-bills and turning to commodities as stores of
value. Certainly China has been investing in stockpiles of commodities, far above what they need in
the near term.

There is no doubt, they are buying at what they see as cheap dollar prices, and these are the exact
factors I have been talking about for some time that could be driving us towards an inflationary
depression, not deflation. That may change, but for now that is where we are headed.

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

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