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To: ms.smartest.person who wrote (2496)	5/21/2007 6:10:37 PM
From: ms.smartest.person	Respond to of 3198

&#8362 NO David Pescod's Late Edition - Victoria Day May 21, 2007<eom>

To: ms.smartest.person who wrote (2496)	5/22/2007 7:57:14 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition May 22, 2007 SELKIRK METALS (V-SLK) $1.20 +0.03 DOUBLESTAR RES. (V-DSR) $0.59 +0.06 One of the commodities that has had quite a run in the last while is zinc and it looks like times might, heaven forbid, become even better. The key again is China. China is the world’s top zinc miner and also consumes one third of the world’s zinc and a former big exporter and is now on the verge of becoming an importer. News over the last few days shows that China may be changing its position on zinc although different news sources have different takes on the story. “Mineweb” quotes, Zhou Guobao, head of the zinc and lead department of China’s Nonferrous Metals Industry Association as saying that, “the sharp increase in zinc exports is a concern, and the government will probably remove the tax rebate to slow export growth.” Others articles from “Reuters” suggests that “China will impose or increase taxes on a range of metal exports in an effort to control exports by energy—intensive industries and ease its huge trade surplus.” They are talking about a roughly 10% tax on some exports of commodities from steel to zinc. Either way, the most important chart is that to the left that shows there’s just not a lot of zinc around. This charts shows inventories of zinc in London and there’s just not a lot left—roughly two days worth. Which sort of gets us to Jim Mustard and his team at Haywood Securities that have put together an amazing piece of work that they’ve titled, “Haywood’s Junior Exploration Universe” and for anyone into the exploration game, it’s mustreading. What caught our eye is their take on Selkirk Metals, and they give a good historical look/see at the company and the work that’s been done on the Ruddock Creek property over the last 30 years. The last two years though, is what is getting this story to be quite exciting and that’s why we interviewed Jim Miller-Tate, the Vice President of Selkirk. Ruddock Creek’s big resource of zinc and lead and a smelter at Trail that’s going need additional feed, this looks like a match made in heaven. The only thing missing on Mustard’s look at Selkirk was a target on the stock. When we caught up with Jim the other day, he tells us that a market capitalization of $100 million is probably justifiable (that works out to roughly $3.00 a share) which is kind of in the line of what Alfred Stewart was suggesting. For a look/see at the 62-page report, simply e-mail Jim at jmustard@haywood.com. It will give him something to do! To us, the one piece that’s absolute must-reading every month (and there’s lots of business reading everyday) is Don Coxe’s Basic Points. The Canadian based out of Chicago with Harris Group and BMO puts out a 30 to 50-page view of the world that is amongst the most perceptive pieces you will come across. (For the first half of the current issue, a PhD in economics might be required). Amongst his investment recommendations for this month: 1. Remain substantially overweight the base metal stocks. As we have been saying for four years, these are core investments and will continue to outperform almost all other stock market sectors. 2. Retain a strong position in the Alberta oil sands producing companies. They are unique assets, now that Hugo Chavez has, in effect, taken development of the only other major oil sands properties off the table for private sector companies. 3. Remain overweight the gold mining stocks and the gold ETF. When gold breaks through $700 the next time, it will be ready to challenge its all-time high… 4. Reduce exposure to banking and financial stocks. 5. Continue to build exposure to agribusiness… 6. Reduce bond exposure all three ways... (Coxe is a believer that inflation may be about to be going the wrong way, particularly if you own bonds). ANDINA MINERALS (V-ADM) $3.26 -0.24 If you look at the global Gold index, it shows that it’s dropped over the last five to six months from around the 340 level to currently around 285. That’s in the area of a 15% to 20% drop for many of the senior gold stocks and it just shows that people have discovered stuff like moly, zinc, nickel and the like and gold (the precious money) is suddenly not as precious. That may change. One gold stock though that seems to be delivering the goods is Andina Minerals, a top pick of Haywood analyst Andrew Kaip. Canaccord’s Steven Butler is also a fan as well. Today with further drilling results, he writes, “We estimate that this new drilling could represent a potential resource addition of between 830,000 to 1.54 Moz.” They announced today, a significant intercept on drill hole 676 which returned 668 metres of 0.81 g/t. That’s low grade, but huge amounts. Butler further writes, “We await additional assays on a final batch of holes within the next four weeks. The next resource update is expected by September when our assumption of a 0.8 Moz resource addition may prove to be too conservative”…..“Our target price of $7.00 is based on an in situ multiple method, ascribing US$85/oz to a potential resource of 4.24 million oz (above 0.5 g/t cut-off), expected by September 2007.” If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com