A Comment -- General Comments From an Expert (A Commentary)

Gold - The most under priced of the metals at this time. You can't look at things in terms of US$’s. In terms of today’s dollars, it will go to $2000 an ounce and probably more.

Uranium - A lot of misconceptions about uranium. Nuclear power is the way we are going to fly for mass energy generation. It is by far the safest, cleanest and cheapest. There is a tremendous deficit right now. World is using almost twice what is being mined. Takes about 10 years from discovery to production. Wouldn't be surprised if the price goes to $100/$150 a pound.

Diamonds - even though there is a so-called deficit of diamonds, he is not a fan of diamond mining. There are at least 2 technologies today that allow the creation of real and totally flawless large diamonds for just a few dollars a carat.

Silver - Going a lot higher. Silver is gold on steroids. It is in basic supply deficit. Governments, including the US, have sold all their silver.

Seasonal Buy and Sell on the TSX Comp – Buy near the end of September and Sell in March. Over the last 5 years, charts indicate there is a very important Low at the end of each September. This has happened 9 out of the last 10 years giving an average 8.2% return plus dividends.

Forecasting oil/gas for about 60 years. Into a new era that he calls “scarcity and price rationing”. All easy things in getting supplies has been done and now it is a question of the price required to constrain consumption to match supply. Expects oil will be $55-$65 when things are normal. For every 100,000 barrels per day disruption there is a loss of $1 a barrel. Feels we are close to a bottom for both oil and gas.

Alberta is the most attractive place to invest in energy in the world because of its huge resource base and less exploited than the US. Located adjacent to the largest market in the world that has a voracious appetite for oil and gas. The only area in the world that has the real resources for continually growing oil production as far in the future as we can see.

Close to 100% of his investments are in energy with 60-65% in Canada. Not concerned about the rockiness of the sector as he has been in a lot of them before.

We have had an unusual weather event in that January/06 was the warmest in all recorded history of the US. If there were no capital dollars used this year to increase gas production, total gas production would fall about 32%. We have to keep increasing drilling to keep production from falling.

Liquid Natural Gas - Significant expansion of LNG producing capacity in the world and there will probably be a tripling of total production in the next 10 years. Analysis shows that very little is imported to the US as gas prices are higher in Europe and Asia. Won't have any significant influence on the supply balance.

The downturn in oil prices in 1998 came about due to world pressure on the US to remove the embargo on Iraqi oil at the time of the Asian currency crisis. Currently, it would take a major recession in the US to decrease the demand for oil to bring prices down to the low $30’s.

The need to reduce strategic reserves in the US is very remote. The treaty was signed by all the OECD countries and every country is required to maintain certain levels.

Hydrogen - On the basis of current technology, the production of hydrogen requires a great deal of energy, the most direct way being electrical energy to split water into hydrogen and oxygen. Not a very good approach at this time.

Coal to produce liquid fuel - This is a method used by South Africa because they had no oil. The technology has been well demonstrated but is a relatively expensive process. Until the world runs one of cheap, plentiful supplies of natural gas, it probably doesn't make any sense.

2-year U.S. Treasury Note. A bit of a contrary call. Yields about 4.65%. If the Canadian economy and oil/gas continues to slow down, and the CDN$ weakens, this will give you a 6/7% return.