PERFORMANCE: ONE MONTH / TWELVE MONTHS

The NAV of THE TIMELESS PRECIOUS METAL FUND decreased 40.5% in October 2008. The price of gold went down 16.6% while the one for silver decreased another 18.3% respectively. Gold and silver indices also plummeted 38.3% on average over the past month. Junior gold and silver stocks - the domain and focus of THE TIMELESS PRECIOUS METAL FUND - have dropped to the level of 2002 and ignore the fact that the price of gold has increased by 180%, the price of silver by 140% during the same period. The market also ignores that gold and silver companies have added millions of ounces to their reserves and many have gone into production.

Many companies trade for the value of their liquid assets. October 2008 will not only be remembered as THE BLACK OCTOBER (or should it be called red for the blood in the street?) but also as THE opportunity to pick up outstanding bargains.

Our main position, GOLD RESOURCE CORP., is a good example of an absurdly undervalued company. With production starting at the beginning of 2009, mill construction being fully financed, a targeted production of 200,000 ounces AuEq at an estimated cash cost of $100/ounce and a targeted dividend of at least $0.50 per share, the share price should be ten times of what it is now - and in due course it will.

The HUI Gold Bugs Index has dropped to the level of 2002 when gold traded between $ 250 and $ 350.

Technical indicators as the one below also indicate a heavily oversold market.

EXPLORATION - RESOURCES - RESERVES- PRODUCTION

Value is created through discovery of mineral deposits and bringing them into production. As the table below shows, 80% of the companies of the portfolio are in production or near production. 20% of the companies have not made any decision to go into production in spite of having substantial mineral reserves. Their aim is to prove up a substantial resource in the hope that one of the majors will take them over - at a substantial premium to the cost of exploration.

HEDGING STRATEGY

As most of our investments are in CAD, we hedged our CAD position when appropriate through the forward purchase of EUR against CAD, which has turned out to have been a judicious strategy during 2006 and 2007. The CAD-positions remain unheged.

Also our EUR/USD positions remain unhedged. The € lost about 20% against the US$ since July. In the long-term, we expect however more dollar weakness.

Many junior gold and silver companies offer impressive low valuations, many even trading below liquid assets.

Companies which have recently been bought by competitors paid between $ 50 and $ 150 for an ounce of gold in the ground. Today, many companies trade at a market capitalisation of less than $ 10/ounce. THE TIME TO BUY IS NOW!

VISIT OUR WEBSITES: www.timeless-gold.com, www.timeless-energy.com, www.sierramadre-silver.com OR www.pzim.ch

REGISTER NOW AT REGISTER@PZIM.CH TO RECEIVE OUR RECOMMENDATIONS OF ABSURDLY UNDERVALUED GOLD AND SILVER COMPANIES.

OUR RECENT RECOMMENDATION:
EUROPEAN GOLDFIELDS (EGU)