#3904 - Tuesday morning thoughts

Good morning. Overseas markets all sharply down across the board this morning. For some reason the markets just realized inflation is rearing its head. High oil prices is finally working its way through the system and at some point, consumer prices will take the brunt of it. Futures are pointing to a down open in the US, however on the economic calendar at 8:30 am the Core Producer Price Index and the Producer Price Index are released. These are broad economic indicators and have the power to move the markets if better or worse than expected.

Back in McFaulds Lake, to start the week, we are once again back on DE2 assay watch from NOT. Lots of rumours the assays are expected today, but in wait and see mode here. Most investors that want to take the chance on the assay results are already in, so NOT stays range bound until then. NOT should see a share price rise with or without assays today as the few investors that bailed before the long weekend pile back in on speculation. I will say this once again I sure hope the DE2 assays are good or all the McFaulds Lake stocks share prices will take a severe haircut. I have a hard time seeing the risk/reward in being long NOT currently but have been wrong many times before, so best of luck to those with the cajhones to take the chance.

FNC finally broke under the $1.50 level on Friday. We shouldn't see any more insider selling at this level as the options to rebuy the shares for insiders are priced at $1.50. The share price of FNC should rebound shortly as investors slowly build up their positions on speculation as the mid June drilling date nears. The one big problem with FNC is can you believe Smith when he tells you a date for drilling. He has missed numerous past deadlines with a host of excuses. Be wary until an actual announcement of a drill rig being on the property and drilling is made. Once burnt, twice shy is the motto when dealing with Peter Smith.

PRB supposedly begins drilling in another two weeks, not sure how spring break up is going in McFaulds but haven't heard of any delays from PRB management. I'm expecting the share price to creep up with PRB as drilling nears. Assays results from PRB's outcrop samples on the doorstep of where they plan to drill are the wild card. We get good assays from the outcrop samples and the share price of PRB will take off. Honestly I think this is the best risk/reward play right now in McFaulds Lake.

FWR/SPQ/KWG looks undervalued at current share prices. Obviously the market knows something that us retail investors don't, or think they do. With fairly good prior assays and more assays expected any day not sure why these stocks are getting no respect from investors. At $.085 SPQ looks like a steal currently. Something not right with this basket of stocks and I'm not sure what it is. FWR with so many irons in the fire looks very cheap also. Perhaps this is just the calm before the storm.

Not much else to comment on in McFaulds Lake as we wait for the DE2 assay results. Best of luck to all investors in these plays.



Al