Financial Sense Junior Gold Mining Index Review by Frank Barbera 11/05/2007

General Comments

It was another winning week for the Precious Metals arena, where Gold, Platinum and Silver all extended there winning streaks on the back of a sinking US Dollar. With the U Dollar now down 11 of the last 12 weeks, Precious Metals basked in the depreciation of the worlds premiere fiat currency feeding greedily on the extension of dollar weakness. For Gold, the week saw still more 27 year highs, with the yellow metal powering past $800 per ounce on Friday of this week. For the week, Gold gained $21.30 per ounce to close at $806.30 up from a spot close of $785 last Friday. For Platinum, the gains were more limited with the white metal edging higher by $2.00 to close at $1456 per ounce, nevertheless ending with its 10th gain in the last 11 weeks. Silver performer very well vaulting 2.6% high moving in tandem with the gains seen in Gold. For Silver the week marked the 8th week up of the last 11. Mining Stocks saw there share of corrections during the week, as the US Broad Stock Market plummeted amid on going and deepening problems in the US Financial Sector. Major losses in Ambac, MBIA, and Citicorp highlighted a second, back-to-back disastrous week for the US Financial Sector as “Structured Finance” remains besieged. The near panic selling in US Financial Assets underpinned everything connected to the metals with the XAU Index gaining 4.72 index points on the week, to finish with a gain of 2.57%, a sharp contrast to the 1.70% loss in the S&P 500. While it may be too soon to proclaim that mining stocks are decoupling from the broad stock market, at least for this past week, decouple they did and with resounding success. Among the Smaller Cap names, the FSO Junior Mining Index ended the week with a meager gain of 2.49 index points to close at 315.38, up from 312.89. In fairness to the small cap stocks, much of the gains seen in the high cap XAU and HUI were heavily the result of a huge week in Newmont Mining (NEM), a long suffering laggard that came to life once again, on the back of a better earnings outlook going forward. For NEM, the week saw the share price gain an impressive 8.50%. Getting back to the FSO Junior Mining Index, the 50 day average ended at 283.34, with the 200 day average at 293.26.

Financial Sense Junior Gold Index™

Mining Index

Above: the FSO Junior Mining Index - 40 stocks

Turning to the Sub-Indices, the Junior Producer Index ended with a gain of 2.29 index points, at 308.56, up slightly from last weeks close of 306.27. Development issues moved higher, gaining 18.94 index points to close at 544.65, up from 525.71. On Friday the 50 day average for Development Stocks closed at 487.68, with the 200 day average at 578.72. Finally, Exploration stocks actually fell on the week, with the FSO Junior Exploration Index ending at 228.76, down from 229.90, with the 50-day average finishing at 203.21, and the 200 day average finishing at 189.49. On the week, secondary gold stocks lost relative strength versus seniors gold’s, as NEM was the primary difference propelling the large caps to more robust gains.

Financial Sense Junior Gold Index™

Producer Index

Above: FSO Junior Producer Index

Financial Sense Junior Gold Index™

Development Companies

Above: FSO Junior Development Index

Financial Sense Junior Gold Index™

Exploration Companies

Above: The FSO Junior Exploration Index

Financial Sense Junior Gold Index™

Small Caps vs. Large Caps, FSO vs. XAU

Above: Small Caps versus Large Caps Stocks, the FSO versus XAU.

Financial Sense Junior Gold Index™

Daily Advance-Decline Line

Above: the Daily Advance-Decline Line for the FSO 40 stocks - challenging the former highs, a good sign.

That’s all for now,
Frank

*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.