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To: ms.smartest.person who wrote (818)	3/14/2006 5:15:24 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition March 14, 2006 IVANHOE MINES (T-IVN) $ 8.70 +0.10 FREEPORT MCMORAN (NYSE: FCX) $51.96 +2.19 The fun part of putting out this letter everyday, is some of the people that you meet and one of the most intriguing we’ve met is Harry Dobson, the Scottish Billionaire who has had interests in enterprises from Brokerage Houses to race horses to Manchester United (the big soccer enterprise) to huge real estate holdings. He was by the other day to talk about his latest gold venture, Kirkland Lake (KGI). He had some interesting comments to make and while he is a big gold bug, he is suggesting that people better be aware of “country” risks involved. He is suggesting, that you have to watch the politics of the country you maybe investing in, because he figures that there is a lot of unpleasant surprises around the corner. For all the mining companies that have decided to explore in countries like Mongolia, Zimbabwe and in the future...a reminder that things can have unpleasant surprises. The Globe and Mail headlined an article on Monday, March 13th and notes that a senior Mongolian cabinet minister is suggesting that the Government wants a 51% stake in Ivanhoe’s massive copper/ gold mine in that country. There are lots of Canadian companies currently working in Mongolia such as Western Prospector (WNP) and I suspect this is not the kind of thing you’d want to be hearing. Recent elections in Mongolia have brought in a former socialist group. Meanwhile, in Zimbabwe, management for platinum miners Implats will sit down with government officials to look at new proposals for mining. The government of Zimbabwe wants to take 51% of all energy, minerals and precious metal mines and plans to give nothing in return. Obviously, platinum miner Implats, which has put a lot a time, money and effort into that country is a little ticked. Meanwhile, yesterday the Peruvian market got clobbered—down almost 250 points the bond market got rocked and the Peruvian currency got battered as well, because the Peruvian presidential candidate Ollanta Humala who is campaigning for higher taxes and tighter limits on foreign investments, according to Bloomberg, closed the gap with front-runner Lourdes Flores in a national pole. She is the free market gal we hope wins. Humala is a little bit scary because he sounds like another Hugo Chavez and is also talking about maintaining Coca production and if you owned a mine in Peru, maybe one should be very worried……… The scary presidential candidates Humala, has a brother currently in jail for taking over a police station, killing four people, starting to formant a little revolution, looking to take over former state owned operations and basically, not a friend of foreign investment. Today, Merrill Lynch, the world’s biggest securities firm downgrades the bonds issued by Peru. Meanwhile in Indonesia, one of the world’s biggest and richest gold/copper mines—the Grasberg owned by Freeport, was shut down earlier this year by locals that didn’t want it operating. The gossip we hear from people on the scene is that the locals have given the company a date that they may be re-visiting the operation to try and shut it down yet again. March 21 is the date we hear. Meanwhile, we are absolutely shocked at the number of people that are buying shares of Crystallex (KRY), which undoubtedly has a big gold situation, but it’s in the country of Venezuela and we all know what Hugo Chavez has done to the oil and gas companies down there. The question is, just when does the other foot drop for the mining companies. OILEXCO INC. (T-OIL) $4.60 +0.19 Today Oilexco hits new highs and volume appears to be picking up. When we go to Josef Schachter (recently on ROB-TV and making Oilexco his second pick) he tells us results could be out shortly on their Joy well. “It’s important that one of these additional plays work out”, he says, “because while Oilexco will have some very high cash flow come on stream later this year from Brenda, its production that could tail off quickly.” Some additional discoveries that would make up for that drop would be very welcome. If the Joy well comes in, he suggests “it’s probably worth another $0.50 to the stock and then they immediately start drilling their Disraeli play.” This one has two zones and he figures the upper zone has about a three out of four chance, but the lower, merely a one out of ten chance. Meanwhile, Oilexco’s CFO Brian Ward tells us that they expect their annual year end financials and new reserve numbers to be announced within the next two weeks. As far as the market perking up, he says he is glad that it’s finally catching up to expectations of what their after-tax net income could be for the company next year, which he forecasts on 30,000 barrels a day, could be $400 to $500 million US. He’s glad people are paying attention and paying more than a blow-down valuation on the stock. He hopes to put out news within the next month on additional banking relationships. As to the Joy well, he suggests they will get to the pay zone in a very quick eight days from spud date. Disclosure: Canaccord has recently led a financing for Oilexco Inc. If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com