Financial Sense Junior Gold Mining Index Review by Frank Barbera 03/10/2008

General Comments

It was a mixed week for metals and mining shares as Silver gained, Gold stayed flat and Platinum fell. On the week, Gold eased by 1.10 per ounce to finish at $972.60, down slightly from $973.70 the prior week, while Silver gained $.34/oz to end at $20.12, up from $19.78 the prior week. Elsewhere, Platinum prices retraced part of there recent advance falling $134.00 per ounce, the largest point decline ever seen, but measured in percentage terms, a more routine 6.64%. In the case of Platinum, the new greatly elevated prices levels make dollar per ounce volatility very high. Nevertheless, the subdued overall showing by the metals left high cap mining stocks flat on the week, with the XAU Index easing .26 to close at 196.35, down from 196.61, while the HUI, the Amex Gold Bugs Index actually gained .65 to end at 486.84, up from 486.19.

Financial Sense Junior Gold Index™

Mining Index

Above: the FSO Junior Mining Index - 40 stocks

With the large cap miners mixed on the week, Small cap miners were also indecisive and directionless, with the FSO Junior Mining Index declining by 5.90 index points or 2.074% to finish at a reading of 278.54, down from 284.44 the prior week. On Friday’s close, the 50 day average ended at 271.53 (rising) while the 200 day average ended at 282.17, with the index slipping back under the 200 day at weeks end.

Financial Sense Junior Gold Index™

Producer Index

Above: FSO Junior Producer Index

Among the FSO Sub-Indices, the Junior Producers ended at 293.00, up from 292.21, with the 50 day average at 278.20 and the 200 day average ending at 287.45. Development stocks ended lower, with the FSO Junior Development Index ending down 6.40 index points to close at 529.08, down from 535.48 the prior week. For Development stocks, the 50 day average ended at 499.57, with the 200 day average at 513.29. Finally, Exploration names were also lower, with the FSO Junior Exploration Index ending at 184.78, down from 192.80, a substantive loss of 8.02 index points or 4.15%. For the Exploration Index, the 50 day average ended at 186.14, with the 200 day average ending at 195.23.

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™

FSO Index vs. the XAU Relative Strength Ratio

Above: The Relative Strength Ratio of Juniors versus Seniors

Over the course of the last 11 months, Small Cap miners have almost inexplicably been losing relative strength versus both Gold and Senior Gold Stocks. This is astonishing since many of these Juniors are up and coming growth companies, which will be sporting a growing production profile in years to come, quite unlike the large cap miners which are generally showing sequential declines in net output.

Financial Sense Junior Gold Index™

10 day Up to Down Volume Ratios

At week’s end, the Small Sector was generally trending toward the overbought side of the equation with 10 day Up to Down Volume Ratios near the high end of the range. While this is not always a negative sign, (sometimes at the outset of a major rally it can be an indication of a kick off), a lot will depend on how prices react next week and whether or not prices can manage some upside follow thru….

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.