my thoughts, page-2

STB does not operate in a vacuum. STB has sold off approx. 30% from it's recent high. So, how are the other potash juniors performing during February to April. Below are the percentage declines from the recent highs to the lows during this period.

TSX:AAA-30% down
TSX:EPO-40% down
TSX:ICP-30% down
TSX:PPI-50% down
TSX:AMZ-25% down
TSX:WPX-30% down
ASX:ELM-10% down
TSX:NGQ+80% up
(this was due to a positive announcement in relation to a non-potash project).

In addition, the major producers TSX:POT, TSX:AGU and TSX:MOS, were down approx. 15% during this period.

The potash juniors and majors are now in various stages of recovery, side ways movements or declines.

So, it's fair to say that there has been a sector wide sell off. One of the major reasons for this sell off is the fact that many of the potash juniors have had a stock price appreciation of 300% to 1000% during the last one year period. If a stock rises on this type of scale, then sell offs of 50% should be anticipated and expected.

STB also does not operate in a vaccum in the Danakil Potash Basin.

In Eritrea:

NGQ is preparing for drilling in their Bada land concession.

In Ethiopia:

Allana has had excellent progress in relation to their drilling, financing and infrastructure build. They've also purchased the land concession of Haro's and they are researching the purchase of Nova Potash's land.

Sainik (large private Indian company) has had excellent drill results.

Ethiopian Potash Corp. will be starting their drill program during the next two months.

BHP has a 17,000 sq. kilometer land package which is located just south of Allana's and Nova's land. At PDAC, BHP indicated that they were purchasing 140 light trucks, hiring 6 geologists and a substantial number of support staff for their Ethiopian projects.

Clearly, the Danakil Basin is being developed. I'm holding STB as long as the fundamental development of the company continues to progress well. The upside potential is that STB will earn a market cap of a potash producer that has one of the lowest capex's/opex's in the world. The substantial risks are; regional, infrastructure and financing. However, I note that these risks are decreasing as the Danakil Basin is being developed as a whole.

Lastly, I believe that there is some validity in technical analysis in relation to the major technical indicators ie. trend lines, moving averages, major formations (bases, peaks, head and shoulders etc.) however I have also found that the more in depth technical analysis is very ambiguous. For the same chart, multiple technicians can have substantially opposing views.

I never let the "technicals" get in the way of fundamental analysis. IMO, the person that focuses on the bobbling cork, almost always misses the rising tide.