FSJG Index™ Weekly Review
by Frank Barbera
February 24, 2006

General Comments

It was a week rife with take-over activity and speculation in the realm of small cap mining stocks as several smaller-cap miners received buy-out offers this week. The offer for Desert Sun Mining by Yamana Gold and Western Silver by Glamis Gold sparked a wave of panic buying among smaller-cap names especially in the Silver arena where Silver Wheaton, MAG Silver and Metallica were all huge percentage gainers.

Financial Sense Junior Gold Index

At week's end, the Financial Sense Junior Mining Index (FSJG) ended at 251.16, up 14.92 index points or 6.31% from last week's close of 236.24. With the close of 251.16, the FSJG Index managed to move a shade above its prior recent high seen on 1/30/06 at a reading of 250.54. The gains in the FSJG Index this week were largely due to the buyouts of both companies, Desert Sun and Western Silver, which are two components of the Junior Developer Index.

On the week, the Junior Producers Index ended up a mild 1.48%, edging higher from a reading of 247.21 last Friday to a close of 250.89 this week. This week's gain by the Junior Producers was in line with the 2% to 3% gains recorded by the XAU and the HUI. On the week, nearby Gold gained $6.20 to close at $561.30, up from $555.10

Financial Sense Junior Gold Index™
Producer Companies

Taking a closer look at the action in the Sub-Indices, the Junior Development Index exploded to close at 753.67, up from 682.38 the prior week for a gain of 10.44%. On the Exploration side, the Junior Exploration Index rose in sympathy with the Development stocks, gaining 8.58% to close at 121.00, up from 111.43 the prior week.

Financial Sense Junior Gold Index™
Development Companies

At week's end, the moving averages for each of the FSJG Indices ended as follows:

With the token new high in the FS Junior Gold Mining Index, it is important to note that the market remains at still fairly-overbought readings when viewed from a more medium-term perspective. At week's end, the Summation Index ended at a still lofty value of 1318.46 and that remains well below its prior high of 1611.84 seen on 2/7/06. In addition, the 9-day RSI for the FSJG Mining Index ended at +66.88 and is rapidly closing on fully overbought values above +74.

While it is too soon to call any type of short-term top, as very near-term upside momentum levels are still strong, the tenor of next week's action will be important to evaluate. Early strength, followed by downside reversals, would in all likelihood be bearish.

On a medium-term trend basis at present, both Gold and the senior Gold Stocks continue to show signs of building technical weakness, indicating a wide-ranging trend change potentially underway.

*Please note that the individual companies in this index are proprietary and will not be disclosed due to compliance and regulatory issues resulting from the relationship of FinancialSense.com, Puplava Financial Services, Inc., Registered Investment Advisor and Puplava Securities, Inc. Member Firm FINRA/SIPC.