Welcome to the U.S. Global exclusive webcast and US Global Investors fiscal 2008 earnings announcement. (Operator Instructions) We would like to begin by introducing Terry Badger, Director of Communications and U.S. Global Investors.

Welcome everyone to our webcast announcing results for the fourth quarter of fiscal 2008 and the results for the full fiscal year. The presenters for today’s program are Frank Holmes, U.S. Global Investors’ CEO and Chief Investment Officer, Susan McGee, President and General Counsel, and Catherine Rademacher, Chief Financial Officer. During this webcast we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements during this webcast that don’t pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and corresponding Form 10K filing for more detail on factors that could cause actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today and U.S. Global Investors accepts no obligation to update them in the future. As mentioned by the operator there will be a question-and-answer session following today’s presentation. If you would like to submit a question during the webcast, feel free to do so at any point by clicking the Questions button in the upper right side of your screen. I’d like to now turn the presentation over to Frank Holmes, CEO and CIO, for an overview of the fourth quarter and the fiscal year.

Page 4, I’d like to just walk through showing that the revenue was down modestly and the biggest difference for the down in the revenue happened to do with incentive fees in the resort sector. I’m going to comment about that in a little more detail particularly the incentive fees. Incentive fees from the relationship which we have with Endeavor was slightly off. But the overall income, we’re very happy with the earnings per share. Later in this presentation I’m going to break down what the incentive fees are with and without, to show you the core business. Next page is 5. Excluding performance fees. As you can see our earnings per share were $0.59 versus $0.52. That swing has been the bonuses we earn off of consulting for outside funds and it can have a big swing factor. What’s interesting in the market place is that the market always values bonus fees at a lower ratio versus your core earnings. And your core earnings as you can see still remain quite healthy even though last year we had substantial volatility in the first quarter like we’re experiencing this quarter. Markets have been very volatile. Last year August the 12 of 07 we had the first unraveling which I’m going to talk about also within the presentation of the derivative issue and the repercussions of the market place as we have these liquidity crises and events. We rebounded from each of those periods and still were able to generate in our core business very healthy earnings per share. Next page is 6. This is a financial snapshot of the quarter. As you can see the difference in the revenue, the net income, earnings per share was predominantly the difference, the decline is attributed to the incentive fees that we received from Endeavor in particular. We’re much larger for year-end 07 than they were in 08. The next picture is excluding the performance fees, just the core [inaudible] business, earnings per share were in fact up for the quarter on a year-over-year basis. So I think this is very significant whereas most of our peer group in financials did not experience such dramatic growth. Next is non-GAAP disclosure. And I’m just basically going to turn this over to Catherine to make a few comments on the technical requirements.

This relates to the slides that show our performance excluding performance fees and related expenses. If you start at the top, we’ve got our revenue on a GAAP basis; we’re excluding our offshore performance fees coming down to a new net income number and then also excluding any expenses related to those performance fees to come to an adjusted net income. When we do this calculation as Frank mentioned we show that our performance did increase in earnings and earnings per share both for the fiscal year and the quarter. And I’ll talk a little bit more about that later as well. This is a technical disclosure. We are required to show a reconciliation between GAAP and non-GAAP numbers.

Catherine Rademacher, Ladies and Gentlemen, is our Chief Financial Officer. Thank you for highlighting to the listeners. Hopping over to the visual number 9, mutual fund assets. As you can see the three-year compounded annual rate of return has been 42%. The offshore client business continues to grow. The three-year number in the category is 290%. I’m impressed with that because there have been predominantly net redemptions in the first six months of this year. I think it was over $50 billion was redeemed of equity funds. We have been able to show for the year and for three years relatively healthy growth. In particular the most volatile sector has been emerging markets and resources where our core expertise lays. The next visual is 10. I wanted to try to put things in context for you and show you that the average assets under management, what they did on a quarterly basis going over the past year and then looking at the Russell 2000 financial index. We are part of the Russell 2000 index and at times we correlate. When it’s down large, we’re down large. And then on other days we’ll be correlating with the price of gold or with the price of oil. So it’s interesting to see this dimension but what’s most important is to see that even though our assets did exceptionally well, we turn around and we’re subject to a decline roughly with the Russell 2000 financial; that trend. Even though we do not have any debt on our balance sheet and these financials in the Russell 2000 have close to 40% debt and a lot of that debt is now exposes to derivative problems and we do not have any of these derivative issues in our products, in our product line. I’ve always said…

Looking forward our growth strategy is going to continue to be the same as we’ve discussed with you previously. We are trying to diversify our product offering and will be trying to develop our hedge fund business. We are also focusing for our registered funds on the institutional sales channel working with consultants, warehouses, independent broker dealers, and registered investment advisors. We have paid particular attention to the global megatrend fund. It is our infrastructure-related fund. We began managing this fund back in October of 07. We’ve seen very healthy flows into this fund and that will continue to be a focus of our sales efforts going forward. And we’re going to also focus on our web-based marketing and sales initiatives that we have begun this year. On the next page I’d like to discuss with you a proxy that we have out right now for U.S. Global Investors funds and U.S. Global accolade funds. It is not a growth proxy but it is a mutual fund proxy that is out there. We are looking to combine the two fund trusts into one trust for better efficiency and administration. We are looking to update the management fee on four funds that have very old fee structures in place right now that do not take into account current economies of scale. We are also requesting the fund shareholders to approve performance-based fees on all of our equity funds. We believe that the performance fee will better align our performance culture we have at U.S. Global Investors with some performance. And also lastly, we are asking fund shareholders on the equity fund to approve distribution plans because distribution is costly and expensive as we all know and we’re asking that fund shareholders participate in some of the distribution fees. Now I’d like to turn it over to Catherine Rademacher, our CFO.

I’d like to briefly summarize our results of operations for the fiscal year 2008 which ended on June 30. Starting with our revenues on page 25, we recorded total revenues of $56 million for the year down 4% from $58.6 million in fiscal 2007. As many of you know, over 80% of our revenues come from advisory fees which in turn are derived from two primary sources: Our SEC registered mutual funds and our offshore clients. Starting with our core operations, investment advisory fees from our SEC registered clients increased by 9% to $39.5 million largely due to increased assets under management during the fiscal year which Frank mentioned earlier. The second component of advisory fees from our offshore clients decreased 50% which also Frank touched on from $13.1 million last year to $6.5 million this year and lower Endeavor annual performance fees were the primary reason for this decline. As we’ve mentioned in our webcast and in our filings, these performance fees may fluctuate significantly from year to year based on factors that may be out of the company’s control and we’re seeing some of that volatility this year. The third primary component of revenue was transfer agent fees which increased 12% to $8.5 million primarily as a result of growth in the number of shareholder accounts and a revised transfer agent fee agreement that was effective in April 2007 but incorporates transaction and activity based fees. Going on to the next page 26, our total expenses for the year were approximately $39.5 million a 5.9% increase over fiscal 2007 and there were three areas that had the largest impact on expenses. First were platform fees which increased 20% to just over $9 million as a result of increased flows to our broker dealer platforms is something Susan touched…

Let’s talk about the future. When we forecast that earnings are going to be, we can only mention how we physically handle the sailboat through waters, both stormy and sunny. And right now we’re going through a storm which we’ve been through many times. We’ve witnessed them and the biggest thing I’ve ever found through these cycles is having lots of cash. A lot of our funds the majority of these funds have huge cash positions. Susan’s comment on the megatrends fund which continues to grow the infrastructure. Even with the decline in the market place and the sentiments so pervasively negative, it still runs over 25% cash and it’s been that way for several months. We’re seeing that the cash is a way that gives us an opportunity to be able to buy. I’m going to walk through now for you and talk about the commodity sector and give you a sort of bigger picture that we see because we like to talk about cycles. So let’s hop to page 31. As you can see this is research from Morgan Stanley and also another group called Stifel Nicolaus & Company. They look at these long-term cycles, and this particular page is Stifel Nicolaus, and I’ve mentioned to you that we look at cycles [inaudible] cycle which is 18 to 20 years based on infrastructure spending. Their research goes back to 1795. This shows you that on average these commodity cycles last 18 to 20 years also. So if this cycle is over, it’d be one of the shortest cycles basically only six years of basically turning up; very short period. And I have dealt with that mainly because of the population demographics which I’ve commented on many times coupled with government programs. It was good to see last night…

Now we’ll take some of the questions that have come in during the webcast and let’s start with one for Frank. Here is a macro question. We’re clearly in a better market in the US. You’ve been in the business for quite some time and you’ve no doubt been through these before, so what’s the best way to shepherd the company and your funds through these difficult markets?

Bear markets are very rare in the fourth year of a presidential election cycle. 80% of the time markets are up. I think it’s even more severe that when you have a bear market in the fourth year that governments go way out of their way to do everything to protect the economy. We’re seeing that. We’re seeing the government take action to bail out Merrill Lynch in the capital market. Stocks are basically naked shorting. They’re doing everything that’s possible, now Fannie Mae, to create a support system through the economic engine. What will that do? A year from now you’ll see a huge explosion in economic activity from that. What do we do? Always have cash. [Roger Gibson], we’ve always commented on him, is to have 25% of your assets in resources, 25% in international, 25% in domestic, and 25% in safe income healthy dividend paying stocks or very safe income to be able to capture these opportunities when things go on sale. So that’s the basic thought process for us is to make sure that you’re diversified.

Question here for Susan McGee. On your part of the presentation, how are the flows from the new relationships you talked about in the past, I’m assuming that’s through the intermediaries?

We saw flows beginning to come in through some of our new relationships and then the economy began to worsen over the summer, and I think as is indicative of the mutual fund industry as a whole, flows seemed to only flow down. So we’re not seeing the flows that we had hoped for but we were not anticipating the slowdown in the economy. But these relationships are starting to come to fruition.

Question for Frank. Strategically, do you manage the company as if performance fees were not there and that they are just a nice bonus if earned? Is compensation from performance fees the majority of GROW’s bonuses?

I would share with you that you see that growth in the fordiac business is quite healthy relative to our peers and that has to do with performance. Performance is a key driver. And strategically I have done everything to create a culture, and one of our values is to curiously learn and improve and to be performance and results driven. Our salaries are low; our bonuses are tied to performing; and it’s always been in the top half. Our fund managers get half of the bonus in the funds which they don’t trade, which they stay long so that they’re incentified. I think that the new vision that we have of merging the trusts has great, great benefits for all shareholders and employees of U.S. Global. This trust that we have is antiquated. It’s old. It’s their prior to Schwab One Source ever being created. The Fidelity platforms. It has a fee structure that basically says you’d have to shut down the funds to exist because the regulatory legal costs and the marketing and distribution costs have grown exponentially. Legal bills when I first bought this business were $100 an hour. Now for fordiac they’re $1,000 an hour. Audit bills, etc. So we need a fee structure that’s going to be more aligned with the cost of distribution and fulfilling best practices from a regulatory world. Now to get performance in this world we’ve created in our culture much more of a hedge fund model performance looking for the value drivers for growth and being able to function in a different way than mutual funds function. So with that we’ve asked the shareholders to align the interest of how we function in our culture with remuneration with their needs and we have found the number one need for shareholders…

With the cash and good financial position, would you consider a stock buy-back?

Yes, we would consider it. Just like we’ve looked at other deals to be able to buy with that cash, we will do things that are going to maximize the returns on capital. If the market gets silly, then we would look to buy back the stock. That’s all I can share with you.

That wraps up the questions that we have for today. Thank you for those of you who did submit questions. This concludes U.S. Global Investors’ earnings webcast for fiscal year 2008. This presentation will be available for replay on our website at www.usfunds.com\webcast. And again thank you all for your participation today.