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Fundamental Research Corp.

Outlook on Commodities and Top Picks

January 20, 2009

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Disclaimers and Disclosure Fundamental Research Corp. (“FRC”) does not own any shares, or have

any investment banking business with the companies mentioned in this presentation. FRC may have fee-based business with companies mentioned in this presentation. In such cases, FRC takes steps to ensure independence including setting fees in advance and utilizing analysts who must abide by the CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Forward-looking statements regarding the companies and/or stock’s performance inherently involve risks and uncertainties that

could cause actual results to differ from such forward-looking statements.

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Agenda

About Fundamental Research Corp.

Outlook on Commodities and Price Forecasts

Attractive trends/basins in North America

Identifying juniors with potential

Top Picks

Companies to track

Q&A

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About Fundamental Research Corp.

Fundamental Research Corp., founded in 2003, is an equity research firm which does not engage in investment banking or brokerage operations. We provide our subscribers with the highest quality fundamental research on smaller cap companies from a value-based perspective.  We are registered as a securities adviser with the British Columbia Securities Commission (registration is in no way an endorsement from the BCSC). Our performance can be found on Investars.

All our research, a complete list of companies we cover, and subscription options are available on our website – www.researchfrc.com.

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Global GDP Growth Forecasts

The global economic slowdown will affect demand for most commodities

-4.00%

0.00%

4.00%

8.00%

12.00%

16.00%

China India Russia MiddleEast

Euro U.S. Japan World

2007 2008E 2009ESource: IMF

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Outlook on Oil – Factors Affecting the

Price of Oil Global GDP Growth

Global supply surplus/deficit – Production from OPEC

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Factors Affecting the Price of Oil – GDP

High correlation between economic growth and oil consumption

Our research found that during 1970 – 2008, 58% of the changes in oil consumption could be explained by changes in global GDP

% Change in Oil Consumption vs Global GDP (1970 - 2008)

y = 0.0478Ln(x) + 0.1764

R2 = 0.5782

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

0% 2% 4% 6% 8%GDP

% c

hang

e in

glo

bal o

il co

nsum

ptio

n

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Factors Affecting the Price of Oil– OPEC Production

How important is OPEC?

Supply from OPEC is still important

OPEC currently accounts for over 40% of world crude oil supply

OPEC adjusts its production to influence price

We found a much stronger negative correlation between oil prices and OPEC production than oil prices and Non-OPEC suppliers

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Factors Affecting the Price of Oil– OPEC Production

Statistics 1973-2008 1973-1982 1983-1992 1993-2002 2000-2008 2005-2008OPEC Correlation -0.13 -0.17 -0.10 -0.08 -0.16 -0.08

R Square 1.7% 3.0% 1.0% 0.7% 2.7% 0.7%

Non-OPEC Correlation -0.04 0.01 -0.10 0.01 -0.11 -0.06R Square 0.2% 0.0% 1.0% 0.0% 1.2% 0.3%

OPEC and Non-OPEC Production vs WTI (1973 - 2008)

13000

18000

23000

28000

33000

38000

43000

bbll/

d

0

30

60

90

120

150

US

$/bb

l

Non-OPEC OPEC Oil Price (WTI)

Source; EIA

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Factors Affecting the Price of Oil– OPEC Production

OPEC’s Spare Capacity is tight

Spare capacity averaged 2.8 million bbl/d during 1998-2008

Spare capacity forecast at 3.95 million bbl/d in 2009, and 4.56 million bbl/d in 2010

OPEC Suplus Capacity

0

5

10

15

20

25

30

35

40

45

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mil

lio

n b

bl/

d

Production Suplus Capcity

Average OPEC suplus capacity during 1998-2008 is 2.8 million bbl/d

Source: EIA

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Short Term Outlook on Oil

2007 2008 2009E 2010EDemand  United States 20.68 19.51 19.12 19.28  China 7.57 7.98 8.26 8.54OECD 49.12 47.71 46.41 46.41Total Non-OECD (EX-China) 29.2 30.22 30.43 31.03Total World Demand 85.9 85.91 85.1 85.98

SupplyOPEC 34.39 35.75 35.04 36.61Total World Suppy 84.43 85.46 84.93 86.59

Suplus -1.47 -0.45 -0.17 0.61Source: EIA, January 2009

Consumption is forecast to decline in 2009 in light of the current economic slow down

However, production cuts are expected to result in a supply deficit in 2009 Consensus oil price forecast is US$51/bbl for 2009

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Long Term Outlook on Oil

Price is expected to recover in 2010, and stay above US$80/bbl from 2013 to 2018 (consensus forecast)

We believe oil prices should stay above historical averages in light of increasing finding and development costs

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Long Term Outlook on Oil

Oil (WTI Cushing Oklahoma), US$/bbl

0

20

40

60

80

100

120

1998 2002 2006 2010 2014 2018

Source: Sproule, GLJ, EIA, and FRC

Forecast

Historical

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Outlook on Copper - Factors affecting the Price of Cu

Global GDP growth (consumption)

Global copper production growth

Global copper supply surplus/deficit

The U.S.$

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Outlook on Copper - Short-term Price Forecast

The ICSG estimates the global refined copper supply surplus will increase from 0.11 mm tonnes to 0.28 mm tonnes in 2009, an increase of 154%

Surplus expected to increase further in 2010

We expect prices to stay soft in 2009

Refined Cu Surplus (Deficit) Vs Price

-1,200

-800

-400

-

400

800

2001 2002 2003 2004 2005 2006 2007E 2008E 2009E

Met

ric

Ton

nes

(000

s)$0.00

$1.00

$2.00

$3.00

$4.00

US

$/lb

Surplus/Deficit PriceSource: ICSG and FRC

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Outlook on Copper - Long-term Price Forecast

Source: FRC

Our research shows that supply disruptions, high cash-costs, and long-term demand growth will be the major price drivers in the

long-term

Regression StatisticsMultiple R 0.906R Square 0.820Adjusted R Square 0.782

LT Forecast

US$ (expressed as C$/US$) 1.15Annual global GDP growth 3.9% (historic growth rate: 1970 - 2007)Annual Cu mine prod. growth 3.2% (CAGR during 1990 - 2007)

Copper Price $2.03 per lb

Copper Price = 5.128 - 3.634 * US$ + 32.867 * Global GDP Growth - 6.367 Copper Mine Production Growth

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Outlook on Gold - Factors affecting the Price of Gold 1. The US$ 2. Inflation3. Geopolitical Tensions4. Financial Crisis5. High Oil Prices

Gold Price Vs US$

$0

$300

$600

$900

$1,200

Jan-73 Mar-80 May-87 Jul-94 Sep-01 Nov-08

US

$

$0

$40

$80

$120

$160

Gol

d P

rice

(US

$ / o

z)

Gold US$

Our research showed that:

* During Jan 1980 – Nov 2008, 15% of the changes in monthly gold prices could be explained by changes in the US$*Correlation b/w oil and gold increases during high oil prices: During 2005 – 08, 17% of the changes in monthly gold prices was explained by changes in oil prices (historically – 2%)* Correlation b/w inflation and gold prices increases during high inflationary periods (eg; early 1980s)

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Short-term Outlook on Gold

1. The US$ is expected to depreciate -

Slowdown in the U.S. economy

Negative real interest rates

Inflation

2. Increasing investment demand amidst decreasing physical demand (GFMS estimates 89% YOY increase in investment demand, and 11% YOY drop in jewellery demand, in 2009)

3. High cash costs (cash costs rose by 22% YOY to an average of $472/ounce for the nine months of 2008) and relatively flat supply

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Outlook on Gold - Long-term Price Forecast

Source: FRC

In the long-term, as the global economy recovers and the US$ improves, we expect the investment demand for gold will decrease; resulting in

softer prices

Regression StatisticsMultiple R 0.85R Square 0.73Adjusted R Square 0.73Standard Error 67.31Observations 345

Gold Price = 426.6 - 1.9 * US$ + 6,519.6 * Monthly Inflation + 4.6 * WTI Crude Oil

LT Forecast

US$ (against major currencies index) 98 (historical average)Monthly Inflation 0.4% (historical average)WTI Crude Oil 70 (FRC long-term forecast)

Gold Price $592 per oz

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Outlook on Uranium

Long-term outlook remains strong

- Concerns about global warming and strong long-term energy price forecasts will lead to increased demand for nuclear power plants

- Global uranium requirements are estimated to grow at 2% per annum through 2030 (WNA)

- About 35 new reactors are under construction, over 100 power reactors are planned and over 250 are proposed

- Global annual consumption of uranium is about 180 million lbs versus production of about 100 million pounds; the deficit is filled up by stockpiles.

- In the short-term, the uranium market is expected to be in balance

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Carlin Trend

Sediment-Hosted gold deposits in Northern Nevada

Future Potential Cortez Hills

Simple one metal mineralization

Low grade but can be massive in size

Barrick Gold Corporation (NYSE/TSX: ABX) is active in the area with its Turquoise Ridge joint venture project

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Greenstone-hosted Vein Deposits

Grades generally range from 5 to 15 g/t Au with highly variable tonnage

Red Lake District

Mature deposits can maintain expansion potential

Predominantly underground operations

Hosts Goldcorp’s (NYSE: GG; TSX: G) high grade Red Lake Mine

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Athabasca Basin

Premium site for uranium exploration since the 1970’s

Mineralized ore is formed in small pockets and veins of very high grade

Cameco’s (NYSE: CCJ; TSX: CCO) McArthur River commenced production in 1999 with an average ore grade of 20.7% U3O8

Major discovery by Hathor Exploration (TSXV: HAT) and joint venture partner Terra Ventures (TSXV: TAS) in early 2008

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Western Canada Sedimentary Basin

Bakken oil play, located in the south eastern region of the Western Canada Sedimentary Basin, is quickly becoming the most important oil discovery since the 1950’s

Hosts light sweet crude oil

Very economic to transport and refine

Encana (NYSE/TSX; ECA) is an active player in the WCSB

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Identifying Juniors With Potential

Projects are analysed based on:

Deposit Type

Stage

Infrastructure

Location

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Identifying Juniors With Potential

Company itself is analysed based on:

Management Technical Experience Experience in putting mines to production/generating

prospects Track record in raising capital/working for public companies Experience in projects similar to the current project Team’s focus on the company Any unusual insider trading in the past 12 months

Financial Position

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Top Picks

* * FRC does not own any shares, and have any investment banking business with the companies. Fees FRC does not own any shares, and have any investment banking business with the companies. Fees of less than $30,000 have been paid by the companies to FRC for research coverage.of less than $30,000 have been paid by the companies to FRC for research coverage.

Company Symbol Current Price Fair Value Commodity

Great Plains Exploration TSX: GPX $0.23 $1.25 Oil and Gas

Silvercrest Mines Inc. TSXV: SVL $0.45 $1.98 Silver/Gold

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Great Plains Exploration (TSX: GPX)

EV / boe

1 MSY $3.69

2 AXL $5.29

3 GPX $6.49

4 RE $6.81

5 HPX $6.82

6 TFL $6.88

7 ZCO $8.17

8 ITX $8.62

9 WTL $8.96

10 TBE $9.08

11 OEX $9.29

12 ONR $10.05

13 DEE $10.05

14 TSK $10.15

15 MOX $10.33

16 CNH $11.30

17 BEN $11.70

Average $8.45

EV / boepd

1 TFL $12,753

2 WTL $12,759

3 HPX $14,709

4 RE $17,133

5 GPX $18,091

6 ONR $20,674

7 ITX $22,633

8 TBE $22,644

9 ZCO $23,284

10 AXL $23,437

11 MSY $23,538

12 BEN $23,966

13 DEE $24,771

14 TSK $25,573

15 OEX $31,705

16 MOX $33,267

17 CNH $35,572

Average $22,736

Discount to NAV

-80.0%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

Source: FRC

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Silvercrest Mines Inc. (TSXV: SVL)

Holds silver-gold properties in Mexico and El Salvador

Recently completed pre-feasibility study on the Santa Elena project in Mexico indicated positive results

Expects to commence production in Q3 2009

Working Capital – LT Debt (at the end of September 2008) - $4.9 mm, or $0.11 per share

EV/Resources - $0.25/oz; Average (Comparables) – $2.08/oz

Stock Price – C$0.45; Fair Value Estimate: C$1.98

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Companies to track

Company Symbol Commodity Note

Ventura Gold Corp. TSXV: VGOPrecious Metals

Awaiting 43-101 compliant resource estimate

San Gold Corporation TSXV: SGRPrecious Metals

In Production; Rating - BUY with a fair value of $1.48 per share (current price - $1.24 per share)

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Thank You

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