As at 30/4/04 the Fund stayed fully invested in a diversified portfolio of major, medium-sized and junior gold and mining company shares active in North America, Australasia, Africa, Russia and other countries, as well as a large physical position in the metals themselves (12% silver + 4% palladium = 17% of the Fund). By month end the share weighting was increased at the expense of metals. Our Advisers, Baker Steel, say gold shares are now "significantly" undervalued relative to gold: regression analysis suggests that, based upon the current - lower - price of gold, the XAU index (a 12 stock mining index) should be at 109 (currently near 80).

Conditions will remain choppy while the market adjusts to a higher $ and until exponents of the $ "carry trade" (free-lunch $ borrowing at 1% for longer term speculation) have been truly burned. Net long positions are now back to pre-bull market levels, below 10mn oz. Though the bottom is not necessarily "in" yet, we believe that investors who buy at these levels will see excellent multi year returns and April 2004 will be seen as insignificant a blip on a chart as the double-digit corrections in each of the last 3 years now appear. Even if metals correct further from here on continuing liquidation, we doubt that shares will feel the same downdraft. Short-term panic has created longer-term opportunity and this, as Baron Rothschild once said, is the best time to buy.

Asset Allocation (as at 30/4/04)	Top 10 Holdings (46% of fund)
Gold and resource shares: 86%	1. Silver Bullion 12%
	2. Mvelaphandra Res 5%
Silver, gold, palladium: 17%	3. Palladium Bullion 4%
	4. Harmony Gold 4%
Cash (3%)	5. Ivanhoe 4%
	6. Randgold 4%
	7. Placer Dome 4%
	8. European Goldfields 3%
	9. Northern Orion 3%
	10. African Minerals 3% (pre IPO subsc)
Asset Allocation (per month)