Expatriate - Silber und Zink

Wer von Euch kennt sich mit dem Wert aus ?

Sieht hoch interessant aus. Erfahrungen, Ideen,

Die Assets sollen 2 MRD wert sein , Inbetriebnahme 2007,

100 Mio Unzen Silber

Marketcap, 20 Mio

EXR.V EXPTF.PK (EXPATRIATE RECS)
http://www.expatriateresources.com/
info@expatriateresources.com 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
118 mil shares fully diluted June 2004 (including July 22 financing at .25/share Cdn)
@ $.24/share Cdn x .76 US/Cdn = $.18
$21.5 mil MC
$1.2 mil CAN capital in the tilll no debt.
Mostly a base metals company: Zinc. Also has some silver & gold.
6 properties. Most of the value is concentrated in the 100% owned Wolverine Project.
Total mineralization across 6 properties: 97.2 mil oz. silver, 565,000 oz. gold, = 103 mil oz. "silver equiv."
3.8 million pounds zinc, also some copper and lead.
$21.5 mil MC / 103 mil oz. silver = $.208
You get "approx" 31.4 ounces in the ground for 1 oz. silver's worth of stock.

Additional comments: Significant zinc bonus, about 3 times the silver value. Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals, but that assumes old low prices for silver, about $5-6?/oz. My method of valuation puts a value on the silver only, not the rest, so this is a significantly better value than my number shows.

Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on EXR.V. It contains a good report on why he is bullish on both silver and zinc.

Expatriate Resources: Silver-Zinc Penny Stock

Jason Hommel

I've been following Expatriate Resources since my weekly report #6 (about 44 weeks ago), when it was at $.26 Cdn/share. The stock was popular among my readers due to the large silver/zinc resources and low cost of the stock, and by week #8, the stock had jumped 15% for two days in a row, and jumped 66% the third day! I noticed the danger, and without selling, I warned my readers in report #8, as follows in the three paragraphs below:

I realized this week how few people are value investors, even readers of my report, which stuns me. This report is all about teaching people the fundamentals, and value investing. It seems people just don't believe that a good deal is really, truly a good deal, unless the price is moving up... and only then they will buy it.

Example: EXR.V this week moved up on Monday and Tuesday, about 15% each day. I was buying more of EXR.V on those days, painfully so, because of the rising price, then I stopped. And on Wednesday, the price of EXR.V jumped up 66%! I was stunned! Did all those people who bought on Wednesday just not realize the value of the stock until the price started trending up? Did I get in just in the "nick of time," or did my buying help cause a feeding frenzy? I don't know, but I suspect I was not "lucky," I suspect that my buying, based on the fundamentals of good value, helped to create further interest in the trend followers. I did not tell anyone I was buying, nor did I email any alerts on EXR.V. In fact, EXR.V has been in my silver reports numbers 6 and 7, so the opportunity was out in the open for everyone to see.

It is dangerous to be a trend follower. Readers! You need to learn to be leaders, and independent thinkers, who can trust the math and the logic of what you see. The next generation of wealthy people who will own the silver will need to be the entrepreneurs and business leaders. You cannot lead and follow at the same time.

On week #8 of my silver reports, EXR.V closed at $.42 Cdn., and Expatriate owned only 60% of the Wolverine project (today, it's 100%). I wrote, you'd "get "approx" 13.8 ounces in the ground for 1 oz. silver's worth of stock."

People listened to my warning, and the stock dropped back the following week, which was contrary to my own interests, of course. But a few months later it reached a high of about $.62 Cdn/share, at which time I sold to pursue other silver stocks, and private placements.

Last Friday, Expatriate closed at $.26/share, and I bought the stock back this week, after seeing the recently released news about the upcoming private placement. I had been looking to buy since I met with Harlan at the New York Gold show, and again at the Vancouver show. Most silver stocks had dropped back at about that time in April, as the silver price dropped from a high of $8.40/oz.

My updated company profile reads as follows:

EXR.V EXPTF.PK (EXPATRIATE RECS)
http://www.expatriateresources.com/
info@expatriateresources.com 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
122.9 mil shares fully diluted (July 23, 2004) (listed on the front page of the web site!)
@ $.26/share Cdn x .77 US/Cdn = $.20
$25 mil MC
$1.2 mil CAN capital in the till no debt.
Mostly a base metals company: Zinc. Also has some silver & gold.
6 properties. Most of the value is concentrated in the 100% owned Wolverine Project.
Total mineralization across 6 properties: 97.2 mil oz. silver, 565,000 oz. gold, = 103 mil oz. "silver equiv."
About 3.8 billion pounds zinc, also some copper and lead.
$25 mil MC / 103 mil oz. silver = $.24/oz.
You get "approx" 27.4 ounces in the ground for 1 oz. silver's worth of stock.

Additional comments: Significant zinc bonus, about 3 times the silver value. Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals, but that assumes old low prices for silver, about $5-6?/oz. My method of valuation puts a value on the silver only, not the rest, so this is a significantly better value than my number shows.

Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on EXR.V. It contains a good report on why he is bullish on both silver and zinc.

Today, Expatriate is about as cheap as it has ever been since I first wrote about it in my report #6.

The gross value of the resources, at today's prices, is as follows:

3.8 billion pounds of zinc x .42/pound = $1.6 billion
103 million ounces of silver x $6.20/oz. = $640 million
565,000 ounces of gold x $400/oz. = $230 million
Total: $2.47 billion
(not counting selenium or copper)

Now, why did people rush to bid up the stock price of Expatriate Resources within the last year? I believe a significant reason was from watching the share price of Canadian Zinc (CZN.TO) and other silver/zinc plays. Canadian Zinc moved up over 1000% from $.11 Cdn to a high of $2.00 Cdn as silver and zinc prices both rose off market bottoms, starting about the summer of 2003. Another silver/zinc company was EuroZinc (EZM.TO), that also moved up around that time, from $.10 Cdn to $.79 Cdn.

There are some company updates to Expatriate that I would like to point out.

First, the company announced on Tuesday, Sept. 7th, that they intend to raise $8 million dollars for a final feasibility study. Obviously, it will increase the share structure and market cap, but we cannot determine exactly, because the price of this placement depends on the share price at the time the deal closes over the next month or so.

Second, the company recently acquired a 100% ownership interest in their Wolverine property, their primary silver/zinc project.

Third, selenium! See the last paragraph of the pdf file here: http://www.expatriateresources.com/LetterMarch182004.pdf

Selenium has moved up in price recently ten-fold -- from $3/pound to $30/pound! This is but one more example of commodities skyrocketing, and our dollar failing. (Not just falling, but failing!) Our economic system is not just meeting the needs of the people. There are many other commodities with similarly astounding gains; Cobalt, nickel, iron, oil. I would not know anything about Selenium were it not for looking at Expatriate.

I cannot emphasize how important this is, when so many commodities are exploding in price like this. Something is seriously wrong in this "paper dollar economy"! Certain commodities, the most desired ones, the ones with a potential monetary demand component, such as silver and gold will not only catch up to the price performance of these other ones, but will surely far outpace them--because of future monetary demand. Oil has increased in the last few years from $10/barrel to $50/barrel. But the public will never desire to store $5000 worth of paper money in oil! What will they do? Put 100 barrels of oil in the front yard? That's just way too impractical. But anyone can go and buy a 90% bag of silver that weighs 55 pounds, that costs under $5000, and put it in their closet at home.

So, back to selenium and Expatriate resources. Normally, when ores are taken to the smelter, they look at the work that will be required to separate the elements, and then charge their fees based on the work. Selenium used to be an "extra cost" because of the extra work to remove it from the ore. It was called a "contamination". Today, however, the increased price for selenium makes Expatriate's ore a bonus. At today's prices, they wouldn't separate out the selenium to throw it away, they would separate it out because it is valuable, and thus, Expatriate would be granted a credit! They currently estimate that Expatriate's ore could supply 15% of world selenium demand!

Now, I don't know what profits that may work out to be, but if the company is trying to raise $8 million dollars in this environment of low silver prices, they must be very confident that they can turn a profit at current metal prices. Furthermore, undoubtedly, the recent price of $.62/share may well help Expatriate to more easily raise the $8 million they are looking for.

Production is not expected until 2006 at the earliest. First, they need to raise the money for a final feasibility study, and then produce a final feasibility study, and then if it still looks good, they will need to raise perhaps another $100 million Cdn to bring the project to production. Rough estimates are to produce 7 million ounces of silver for a 10-year mine life, with production cost among the bottom 1/4 of silver/zinc producers. And, of course, those are all understood to be estimated and rough numbers until they produce a final feasibility study.

Expatriate has an excellent web site. They list the fully diluted shares right at the top left corner of the web site, and news releases are listed right below, right on the front page. It's easier to find information there, than at my own web sites! They have a few press releases on the zinc market that are well worth reading.

The management of Expatriate are experienced professionals. Harlan Meade, president, is a geologist (also with a degree in Business Administration) who has taken other properties to production. Excerpt from the company web site:

Previously, Dr. Meade was Vice-President Exploration and Environment of Westmin Resources Limited from 1992 to 1997, continuing as Vice-President Exploration through February 1998. He played a major role in the exploration and/or development of several deposits currently being mined by Westmin's successor company.

Today, Sept. 8th, Expatriate released positive drilling results. Headline: Expatriate Discovers New Massive Sulphide Showing in Finlayson District, Yukon. 13.4% zinc and 40g/t silver.
http://biz.yahoo.com/ccn/04090…93d929aa174a0d15ce_1.html

Final Disclaimers and Warnings: Please be careful about being an aggressive buyer of stocks on the internet after reading an article online. One of the reasons why I write about specific companies is to showcase examples of good values within the silver stock sector. But remember, there are many alternatives. I also own plenty of Metalline Mining (MMGG) which trades on the bulletin boards, US, (MMGG.OB at Yahoo!). Metalline is another silver/zinc company. A few other silver/zinc companies are, Grupo Mexico SA de CV (GMBXF.PK), Apex Silver (SIL), Farallon (FAN.TO), Huldra Silver (HDA.V), and Abcourt (ABI.V). Given my methodology, currently Expatriate compares very favorably on my silver stock report, along with several other companies, such as Mines Management, Avino, Abcourt, and Capstone. You can signup to receive my weekly report that covers the market caps of about 85 silver stocks, or read the archives of my prior reports, at silverstockreport.com or goldismoney.com.

Expatriate has not paid me to write this article, and I own stock in Expatriate Resources.

Jason Hommel
goldismoney.com

9 September 2004

Der Link dazu: http://www.gold-eagle.com/editorials_04/hommel090904.html

Expatriate will be closing a $750,000 Cdn private placement by Sept.
15, so they can get started on the next financing where they will be
raising up to $8 million.

In the first PP for $750,000 Cdn, the units are priced at $.25 Cdn. A
unit consists of one share and one full warrant at $.35.

In the second PP for $8 mil Cdn, the units will be priced as determined
by the stock price later on.

Yukon Silver-Zinc Project:
--Reserves and resources contain 74.7 million ounces of silver and 1.74
billion pounds of zinc, as well as other base and precious metals.
Recent consolidation of property gives Expatriate 100% interest and a clear
development path forward.

Expatriate will be spinning off their other zinc/silver properties,
into "Pacifica Resources", as they spun off their gold properties into
StrataGold.

Sept 1, 2004 Financial Information:
Issues Shares ~ 97.5 million
Fully Diluted Shares ~ 121.5 million
Working Capital ~ $3.7 million
Options & Warrants Exercise ~ $6.3 million

Expatriate compares rather favorably on my list of silver stocks, and
so I'm quite pleased to be able to share the notice of this private
placement opportunity with you. I don't plan to participate in this PP at
this time, as my own portfolio needs require the freedom and liquidity
of free trading shares at the moment--so that I can raise the funds for
excercising warrants in other deals I've done. (I've done just a bit
too many PP's in the recent past.) I have been watching Expatriate's
stock price very closely, and I may be a buyer in the $.22-$.24 range. A
stock price just a bit lower than that, free trading, may be comparable
to this PP, since with the PP you get the warrants.

Please see my recent silver stock report here:
http://www.silverstockreport.c…s/silverstockreport49.htm
http://www.goldismoney.com/ssr/SS49.html

Note, in the profile in my report, the silver ounces listed (100+
million) are across 6 properties. The resources for Wolverine alone are
only 74 million ounces of silver.

With Wolverine alone, and with the $8 million PP at current share
prices, the company's valuation and resources may compare as follows:

Fully diluted shares: 121.5 million.
+ the $750,000 PP: + 6 million shares fully diluted.
= 127.5 million fully diluted
+ $8 mil PP (assuming at .25, and assuming 1/2 warrant the details of
which are not yet fixed)
+ 48 million shares
Total: 175.5 million shares
@ .25 Cdn x .77 Cdn/US = .1925
$33.78 million. / 74 million oz. silver = $.456/oz.

But there is the large zinc bonus, and the other 25 million ounces in
the other properties will be spun off to existing shareholders.

Perhaps most importantly, Expatriate is looking to produce 7 million
ounces of silver per year. (The Wolverine deposit is being advanced to
bankable feasibility study and a possible production decision in early
2006.)

The $8 million is for further exploration and to bring the company to a
final production decision. Actual mine construction and development is
expected to run around $100 million.

By then, if the market cap of Expatriate is $150 million:
$150 mil MC / 74 mil oz. = $2.02/oz.

For comparison:

CDE (Produced 14.2 mil oz. silver in latest fiscal year (early 2004)
$783 mil MC / 279 mil oz = $2.81/oz.
PAAS (produced 7 mil oz. silver in 2001:)
$1025 mil MC / 743 mil oz. = $1.38/oz.
HL (est. 2004 production 9 mil oz. silver and 215,000 oz. gold )
$706 mil MC / 48.9 mil oz. = $14.44/oz.

Here is the press release about the Expatriate's next PP:

Expatriate Announces $8.0 Million Financing For Wolverine Silver-Zinc
Project in the Yukon
September 7, 2004 - Expatriate Resources Ltd. (EXR.TSX Venture) is
pleased to announce that it has entered into an agreement for an $8 million
financing to qualified purchasers by way of a best efforts brokered
private placement through a syndicate of Agents consisting of Paradigm
Capital Inc., First Associates Investments Inc., Dundee Securities
Corporation and McFarlane Gordon Inc. In addition, the Agents will have an
over allotment option for an additional $4 million.
The financing shall consist of units and flow-through common shares.
Each unit consists of one common share and one half of a common share
purchase warrant exercisable for a period of 24 months from closing. The
securities will be sold by private placement in the provinces of
Ontario, Nova Scotia, Quebec, Manitoba, Alberta and British Columbia and in
such jurisdictions outside of Canada, including the United States, as
the Company and the Agents mutually agree. The pricing of the offering
will be determined in the context of the market with closing scheduled
for October 21. The Agents will receive a 7% selling commission and
Agents warrants for 10% of all flow-through common shares and units sold.
Proceeds of the brokered financing will be added to the current
approximate $3.5 million in working capital and be used primarily to fund the
planned underground test-mining program of the Wolverine zinc-silver
deposit and other feasibility work that is planned for this winter. The
Wolverine deposit is being advanced to bankable feasibility study and a
possible production decision in early 2006. The development of the
silver-rich Wolverine deposit and potential for additional discoveries in
the Finlayson District, Yukon provides investors with an attractive
zinc-silver investment opportunity.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption from such
registration is available. All dollars in this release are in Canadian
funds.
This press release may contain forward-looking statements based on
assumptions and judgements of management regarding future events or results
that may prove to be inaccurate as a result of exploration and other
risk factors beyond its control and actual results may differ materially
from the expected results.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OF THIS NEWS RELEASE.

If you would like to participate in this PP, and if you let Expatriate
know you heard about this opportunity from me, Jason Hommel, then I may
earn a 5% finder's fee.

For more information and to participate in this PP, contact:

Brian Soregaroli ext. 235
and/or Wendy Pemberton, Investor Communications
Telephone: (604) 682-5474
Toll-free: 1-877-682-5474
Facsimile (604) 682-5404
info@expatriateresources.com
http://www.expatriateresources.com

Zinc Now Outperforming Other Base Metals

and Selenium Shines

I started a shareholders letter November 5, 2004 with the caption “Zinc Through $0.55/lb by Christmas??” ... but I didn’t get it finished. At the time, that forecast would have appeared as an outrageous call given that zinc was at about US$0.471 per pound on November 4th. As I write this, the LME price is US$0.55 per pound and additional increases appear to be coming….more on this in a minute.

This is the last Expatriate shareholders letter, as Expatriate will, at market open on Monday, December 20, 2004, change its name to Yukon Zinc Corporation. On December 14, 2004 the shareholders overwhelmingly approved the Plan of Arrangement (99.78% in favor) resulting in the transfer of the non-Finlayson District exploration properties to its subsidiary Pacifica Resources Ltd., and the transformation of Pacifica into a new exploration company on the TSX Venture Exchange.

The formation of Pacifica completes the reorganization of Expatriate that began in spring 2003, which included the formation of StrataGold Corporation in November 2003 as a successful new gold exploration company. With some hard work and ingenuity perhaps Pacifica can grow as quickly as StrataGold has in its first year. In that time, StrataGold has increased its market capitalization from $13 million at the start to approximately $42 million at the time of writing.

The group of companies, including Yukon Zinc Corporation, Pacifica Resources and StrataGold Corporation, will be known as the Expatriate Group of Companies. The group shares considerable technical, legal and financial experience and expertise of the various team members and benefits from operating synergies.

Expatriate will change its name to Yukon Zinc Corporation on December 20 and trade under the symbol YZC on the TSX Venture Exchange. The renaming of Expatriate marks the evolution of Expatriate from an exploration company to a development and mining company.

The Company recently announced Mr. Richard Goodwin as the Vice President of Mining to champion the development of the Wolverine deposit as Canada’s next major zinc-silver mine. His appointment marks a major step forward for the Company. Early in the New Year we will mobilize underground mining equipment to the property and commence the test mining program as the final work required to complete a bankable feasibility study and make a production decision.

Approximately $8.5 million of the $16.6million proceeds of the October financing is earmarked for the Wolverine test mining program and feasibility study; leaving approximately $5 million unallocated for advancing the project. Perhaps the most encouraging recent technical development is the very favourable test results from the heavy media separation (HMS) test work completed at Lakefield.

The test work indicates that application of HMS technology could provide a very effective pre-concentration step through the rejection of waste and therefore production of an ore product that contains considerable waste material. Successful application of HMS technology at Wolverine could reduce mill process costs on a unit of production basis. However, the main benefits will be in mining where it provides a means of removing waste material from ores prior to processing, with only minor metal losses. The effective removal of waste allows mining to maximize recovery of the high-grade ores; particularly where excessive dilution with waste rock occurs due to multiple bands of massive sulphide mineralization, hangingwall failure, contamination with footwall material and in the mining of thin massive sulphide lenses. Importantly, application of HMS to the mining of thinner zones would allow the conversion, with additional drilling, of significant amounts of indicated and inferred resources into mining reserves, thereby increasing the mine life.

Expatriate also recently completed the acquisition of all of Atna’s interest the Wolverine Joint Venture, making the final $1million payment, and the company now owns 100% of the Wolverine Property. The Company continues to pursue opportunities to consolidate the District and has recently staked an additional 430 claims to augment its prior 3,500 claims.

Exploration Update ~ How Long Until the Next Discovery in the District?

In my last shareholder letter I provided this photo of drilling on Thunderstruck.

We completed three holes on the Thunderstruck target that tested a small part of the Thunderstruck discovery before winter conditions and technical difficulties made it difficult to continue. A fourth hole was drilled on the Goal Net property in November to follow-up encouraging drill results from 2001.

On the Fisher Ridge target, the second drill hole is nearing completion. Drilling on the Fisher zone is following-up massive sulphide mineralization that was intersected in two drill holes completed in 1996 and 1997. The mineralization is on the Wolverine horizon approximately 7 kilometers northwest of the Wolverine deposit.

Assays for these holes will be released early in the New Year. Drilling will resume in late January with in-fill drilling on the upper part of the Wolverine deposit before resumption of exploration drilling in April.

Elsewhere in the District, Teck Cominco made a modest discovery of massive sulphide mineralization immediately north of Yukon Zinc’s Goal Net property.

Pacifica should commence trading on the TSX Venture Exchange at market open on Monday December 20, 2004 under the symbol PAX. Management wishes to thank all shareholders for their support in the approval of the Plan of Arrangement. Pacifica provides current Expatriate shareholders a second opportunity for growth in the search for and development of base metals.

Following the investment of $1.2 million by Expatriate, Pacifica will have approximately 19,050,000 shares issued with Yukon Zinc Corporation holding approximately a 25% interest. An additional flowthrough share financing of 3,500,000 shares is in progress to provide an additional $1,050,000 of working capital to Pacifica.

Expatriate’s prime focus in the first part of 2005 will be resumption of drilling on its Islena property in Chile followed by summer programs on its Selwyn and Yava properties. At Islena, drilling is planned for the first quarter to follow-up on an 8 metre intersection in drill hole UN04RC-03A that grades 3.62% copper, 0.43% zinc, 0.16% lead and 288.7g/t silver, and a similar intersection in hole UN04RC-12.

Drilling is also planned for the Yava property in Nunavut to test geophysical anomalies identified in summer 2004 adjacent to the Yava zinc-silver-copper-lead deposit that was last drilled in 1974. Previous drill holes include high grade massive sulphide mineralization grading up to 28.7% zinc and 360 g/t silver over 1.8 metres within broad mineralized sections.

A drilling program is also planned for Pacifica’s wholly owned claims in the Selwyn Project, which is located within the Howard’s Pass District. This district in the eastern Yukon contains one of the largest undeveloped zinc-lead deposits. Pacifica’s claims are well located within the District and are being prepared for stratigraphic drilling of the favourable sedimentary horizon. The claims have potential to host significant tonnages of strata-bound zinc-lead mineralization.

Pacifica also intends to embark on an aggressive acquisition program similar to that successfully followed by StrataGold over this past year, except that the focus will be base metals, not gold properties.

Market Updates

Finally Zinc Inventories in Free Fall!

For several years, Expatriate has been forecasting a very favourable market for zinc, following the consumption of significant concentrate and metal inventories that resulted from the development of several large mines in 1999 through 2002 period. It was simply a matter of time before the supply deficit began to rebalance the market.

The zinc markets remain in supply deficit, with Teck Cominco recently forecasting a deficit of 373,000 tonnes for 2004 with no new production forecast until 2007. As the following graph by the Australian metal forecasting group CRU International illustrates, the world needs approximately 2 million tonnes of new zinc production by 2007 to meet forecast metal demand. At this time there are no new zinc mines in construction; however, in the past two weeks there have been announcements to develop the Duck Pond deposit in Newfoundland (Aur Resources: 34,500 tonnes of zinc per year starting late 2006 and the San Cristobal deposit in Bolivia (Apex Silver; 180,000 tonnes of zinc per year starting 2007). Other projects are under feasibility study; however, it is clear that new planned production will fall well short of the 2 million tonnes required as these are all significantly smaller than San Cristobal.

Chart by CRU International illustrates forecast Global Zinc in concentrate required and current supply from mines and possible additions.

Requirement for new mine production is approximately two million tonnes by 2007.

Zinc inventories on the London Metal Exchange have declined 70,000 tonnes from 710,000 tonnes to 640,000 tonnes since the time of my last newsletter on October 27, 2004, suggesting an annualized supply deficit of over 600,000 tonnes – which is nothing short of remarkable! If this rate of decline were maintained, there would be no zinc inventories left by the end of 2005. This is unlikely to happen as some producers will certainly be able to expand their production, but the amount of increase is likely to be modest for the following reasons:

1. Most zinc mines are underground mines with long lead times for expansion due to requirement for expensive and time consuming development to access additional ore,

2. Other mines are nearing the end of their mine life, and

3. Several producers cut back development in lean years to reduce operation losses.

The rapid decline in metal inventories and the beginning of a significant increase in zinc price is beginning to attract market interest with several groups now calling for zinc to outperform the other metals going forward. Producers and analysts are now in agreement that hidden inventories are gone.

Current Inventories are now about 640,000 tonnes. The following chart illustrates that as zinc inventories reach the 300,000 tonne level, zinc prices have historically risen sharply, particularly if there is no significant new production on the horizon. The zinc price has risen dramatically from US$0.47 to US$0.55 since my October 27th letter. The accompanying long-term Inventory-Price graph illustrates the ability of the zinc price to rise to significantly higher prices. Investors are also reminded that the price of nickel rose from US$3 to US$7 per pound over a 24 month period commencing fall 2001 as inventories declined to historic lows.

The following quotation is repeated, as it was one of the early forecasts that is now being echoed my many:

Merrill Lynch Investment Managers (MLIM) said on Friday (October 22, 2004 ~London, UK): MLIM's natural resources team, which has some $1.8 billion under management, said it was increasingly looking to invest in aluminium and zinc producers -- metals which have become scarcer recently, just as copper, nickel and others did last year. In a briefing to journalists, the head of MLIM's natural resources team Graham Birch said 2005 in general looked like it would be another record year for mining stocks. Fundamentals such as low stocks, little new supply and continued Chinese demand, were still in place he said, despite nerve-racking swings in investor sentiment. "Some of the other metals which China has not been so short of...look like they are going to join the party in 2005," said Evy Hambro, director of MLIM's natural resources team.

Zinc producers also have the potential to shine late in the metals boom Hambro said, because such little money had been put into zinc exploration and production. While zinc inventories in LME warehouses are at roughly the same level they were a year ago, stocks of 712,000 tonnes are almost 10 percent down on April's figure. "We are still at an early stage there, but it is probably one of the last metals to perform. The market will be in deficit next year, and this will help prices to improve," he said. "We would want to buy pure zinc producers."

Silver Outlook Continues to Shines

The outlook for silver continues very strong; however, we are beginning to see announcements of several new silver mines, perhaps the most significant being San Cristobal, which is forecast to produce approximately 22 million ounces of silver per year by early 2007 (note that this assumes bank financing for the project is forthcoming soon).

The Yukon Silver-Zinc Project is forecast to produce more than 7 million ounces annually commencing second half of 2007. As such, Yukon Zinc will also become a significant silver producer.

Selenium Markets Remain Strong

In my last shareholders letter I noted that selenium is no longer an impediment to development of the Wolverine deposit and that the current high prices has lead to strong interest by the smelters to take all of the concentrates from the standalone development of Wolverine.

The above chart illustrates that selenium prices, after consolidating in the U$25 to US$30 range, have now moved higher in response to continuing tight supply. The following is a quotation from Metal Bulletin for December 15, 2004:

“Selenium Continues To March Upwards”

London 15 December 2004

Selenium’s Bull Run through 2005 is gathering more pace as the end of the year approaches, as consumers and traders scramble to pick up what very little spot material remains.

An extremely tight market has pushed the metal to between $30.5 and $34.5 per lb from around $8.5 per lb, with some traders claiming to have seen even higher numbers.

“We are getting about 15 enquiries a day for selenium but we cannot in any way fill them all,” said one London-based trader. “I am fighting to get any scraps of material that I can lay my hands on. We can’t complete as much business we’d like to as the producers are struggling to keep up with demand.”

Others agreed, with many expecting the price to carry on moving up, as there are no scheduled plans for extra material to appear on the market until 2006 at the earliest.

“Selenium is one of the only [minor] metals at the moment with any true strength behind it,” said a second trader. “We could well see $40 very soon if the current factors remain.”

The majority of selenium is tied up in long term contracts, making spot material extremely difficult to obtain.

“If you’ve got spare material, you can more or less name your price at the moment,” said a third market participant.

Given the shortfall in supply, there is a reasonable expectation that when Yukon Zinc concludes its concentrate agreements, that these contracts will include selenium price participation above some selenium level (rather than the penalties that have been part of previous economic studies), resulting in significant additional revenue for Wolverine production.

Evaluation of selenium will resume with commencement of additional metallurgical work in the first quarter.

Outlook

As I indicated in my last letter, zinc consumption in China was up 26.5% during the first six months of 2004; this is very significant given that China makes up 25% of the market. The key to sustained high growth rates in consumption rates is very much dependent on Chinese and American consumption. Industrial output in China for the first 11 months of 2004 grew by 14.8% indicating that the modest slowdown desired by the government has been achieved and that sustainability of growth is more likely to be achievable. Finally, investors in the United States and elsewhere are beginning to accept that China is in the midst of a major long term period of growth, which is very positive for metals consumption. Interestingly, Metal Mining of China is rumoured to be opening an office in Vancouver; presumably to track opportunities for investment and securing of concentrates.

The ISM purchasing manager’s index in United States increased in November after three months of declines. Elsewhere, German business confidence increased in December, the recent purchasing manager’s indexes in the Eurozone fell slightly as did Japan. In summary the other economies, on balance, appear to be maintaining a neutral to small positive growth. This is a very positive backdrop for the continuing growth in China. In summary, the outlook for continued strong metal markets for the first six months of 2005 remains very positive.

With the transition to development, the task at hand for Yukon Zinc Corporation is to attract the attention of the financial community to focus on the Company as a future producer. Although the focus is clearly on development, the Company intends to continue its exploration in the Finlayson District to provide the discovery that provides an expansion scenario for the current production plan.

The past year has been very satisfying:

· Expatriate raised approximately $21 million in 2004 and has the money to take the Wolverine Project to bankable feasibility

· Pacifica Resources Ltd. was created crystallizing the value of the non-Finlayson assets and providing shareholders a third opportunity for growth, and

· StataGold recently completed approximately $22 million in financing and has embarked on a very promising journey with its exploration of the Tassawini property in Guyana and the Dublin Gulch project in Yukon.

Thank you for your support during the past several years, and the outlook remains very positive for increased growth in shareholder value.

Respectfully,

Expatriate Resources Ltd.

Harlan D. Meade
President and CEO