A Melman Minute — January 28, 2008

This will be coming to you a little earlier than normal this morning as I will be en route to the “Association for Mineral Exploration BC Roundup 2008” conference in Vancouver, British Columbia.

Unlike many of the mining conferences which are geared to the junior mining industry and investors in that segment of mining, “Roundup 2008” is primarily for the technical, service and supply arms of the industry. A huge number of technical presentations will be made during the conference, which runs from January 28-31. In addition, several political leaders associated with mining will be addressing the gathering, with attendance estimated to number close to 6,000.

As always, we encourage our readers to attend these conferences whenever possible to keep up to date on developments within mining exploration, development and the political/economic background.

In early overnight trading, the Japanese market plunged by more than 500 points, retreating to the 13,000 level and giving back more than half the amount recovered since the panic lows of last week. European markets also opened to the downside as fears of price inflation brought about by huge increments in money supply numbers would combine with a showing economy to produce “stagflation”. Uncertainty also lingered regarding the Federal Reserve Board’s upcoming meeting later this week.

Following emergency meetings over the past few days, Eskom Holdings Ltd., South Africa’s electric utility, announced that they would be able to supply the mines with 75% of their normal average power consumption, but the major South African mines indicated that they would be unable to provide a sufficient margin of safety until Eskom could provide 90% normal power. Among the major mines which have been affected are Anglo Gold Ashanti Ltd., Gold Fields Ltd., Anglo Platinum Ltd., Impala Platinum Holdings Ltd., and Harmony Gold Mining Co.

Given that South Africa had been the largest gold mining nation on earth for many decades and only recently slipped into second place behind China, serious shortages in production from that nation could have a marked effect on worldwide gold demand/supply balance calculations.

The United States Dollar continued to trend lower and remains a clear focus of our attention. The critical area on the “DX Index”, which reflects strength in that currency, remains the zone from 75.0 to 74.5. A break below that area could have truly significant importance. The chart is included for your review.

DISCLAIMER

The information presented above is based on data which we believe to be from reliable sources, but the accuracy of which cannot be guaranteed. Any opinions or predictions contained herein are those of the editor and are likewise offered also for information purposes only.

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