Terry Badger - Director of Communications Frank Holmes - CEO and Chief Investment Officer Susan McGee - President and General Counsel Catherine Rademacher - Chief Financial Officer

Greetings and welcome to the U.S. Global Investors exclusive webcast U.S. Global Investors second quarter of fiscal year 2008 earnings announcement.. (Operator Instructions). Now we would like to begin by introducing Terry Badger, Director of Communications for U.S. Global Investors. Thank you, you may begin.

Thank you, and welcome everyone to our webcast, announcing results for the second quarter of fiscal 2008. 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 made 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 10-Q 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 obligations to update them in the future. I would now like to turn the presentation over to Frank Holmes, CEO and CIO for an overview of the first quarter. Frank?

Thank you, Terry and welcome everyone. I apologize for the glitches in technology there, and really appreciate your patience in listening and staying on. We're very excited about what's taken place in a financial backdrop that is so disastrous for the marketplace, and with doubt and suspicion everywhere. And we're very thrilled that we grew, in our revenue line as you can see, between '06 and '07, our net income remained flat, and our earnings per share remained flat. We will walk you through this presentation, that's a huge win for us in context. But why did we remain flat? Well, we beefed up. Beefed up the team, and it's very balanced, we beefed up our team, offensive and defensive squad, as we like to call it. Most importantly, we started off with compliance. We really enhanced our compliance, and that's key in our world, that we must have the best compliance procedures. And then marketing, we added to institutional, and also to retail, and we have this great pool of people today to beef up and extend our reach in the marketing. And then portfolio, we hired a global strategist, and some additional people in the portfolio team, which is so important for OpEx. Now one of the reasons why you see the net income is basically flat, is because we did so well, and our basis are low, but the performance is tied to being in the top half, and being as you see, where in the previous press releases, we were in the top 1% and 2% of so many different categories, and that leads to healthy bonuses for the portfolio team, and that's what is most important, and that's what creates a sustainable growth. Hopping over to page 5, we see assets under management. Our compounded annual growth rate for Mutual funds for the past three years has been 58%, and for offshore clients, it's over 300%. For all the gloom and doom in this world, with this growth, we will be able to show that there are some positive elements here. At the end of this presentation that I am going to walk you through, I want to say that we still remain cautious because of volatility, but inherently very bullish, because of government policies globally. So, assets under management continue with nice healthy growth. Let's take a look at the quarterly sequential. Average assets under management, as you can see, we've a nice growth for the past three quarters and year-over-year, you have already seen that. Well, page 7 please, that’s our key driver, and I believe it is important for our sustainability. We do not have any subprime or derivative funds or products like that. So, we are not struck with lot of the headaches that Wall Street is, but in our other categories, we are in the top 1% and 2% according to the Wall Street Journal, out of a universe of mutual funds, that, I believe, it pushes over 6,000 funds. This is like the Olympics, and we are extremely proud, one year, five years, 10 years, you name the category for those shareholders that have used us to diversify their portfolio into international funds and resources, all have enjoyed very healthy performance. Hopping over on page 8, gives you some of the numbers. We have to also show this from a compliance point of view, any time we talk about our funds. We have to show a balanced perspective in expense versus effective. So this is for reference. But as you can see, in a year of this paralyzer, gloom and doom, Russia is bad, and Koopmans is Man of the year, and the fund is up 32%. China, the bubble is there, the bubble, we heard nothing but bubblology all last year, and this time it was up 53%. And global resources were up almost 40%, and world precious minerals were up 23%. And the three-year numbers are also very attractive. And hopping over to page 9, as you can see, which I am very proud about, is the All American, and the Holmes Fund, which far outperformed the General Equities, which were up barely 5% last year, the big-cap All American fund was up 27%, and the Holmes Growth Fund, which is basically mid-cap, those two funds follow a discipline of 20% returns in equity, a 20% growth in earnings and a 10% growth in revenue, and that type of selection process was important in giving great performance. And then the Global Mega Trends Fund. As a new fund, Susan will talk about it; we are very excited about, and also had a great and so did Gold shares. Let's hop over to page 10; no sub-prime issues, as we show you that in the year-over-year, we are flat. But look at the Russell 2000 financial sector and a source of JP Morgan report, minus 9%. We feel that, that's excellent in light of a very scary market for people. Hopping over to page 11; what's important for our disciplines and what we believe is so important to focus on return on equity, and then you have to be able to reach out and invest in yourself or hiring in our business, new intellectual capital, and some new systems, so that you could have sustainable growth, and maintain those high returns on equity. And we are very happy to be two times our peer group for the past year, and for the past three years, also more than two times our peer group in delivering multi returns on equity. Now the big question is page 12; the volatility. And we like to talk about this because, we have only 15 million shares out, and we have some few substantial value investors that made a major investment and our group is very proud of this. In November, when everyone thought the world was coming to an end, and it still hasn’t happened, because we have thousands of investors, traders, and our securities, and what you are seeing is a context that US Global basically does have a higher volatility and the daily volatility is 4.81%, basically that's just a normal day, it can be up 4.8% or down. What we're trying to point out to you people is that, use this for events, when you see these days where it's dropped 9%, the 5 day average that happens in one day, it's actually very low risk buying, and the same thing when you take a look at the overall. We commented on this on CNBC, as to how to anticipate where you're participating to manage your expectations, to manage the volatility is to be able to take a look over the normal volatilities and come underneath that. Hopping over to the next page will give you an idea of a visual, awesome theatre that shows you one-day standard deviation which is almost 5%, and shows you how often it spikes up and down more than 10%. So therefore you get some great opportunities. I ask this question all the time, when should I buy? It's not my job to tell people to go and buy the stock. But I tell them that you can lower your margin of error by using a tool like this, so that when the stock falls more than 5%, the risks are just less that when you're buying at a higher risk time. So hopping over to page 14, we're extremely embarrassed. One of the highlights is, that if you look at the S&P side to EPS, you can see the short interest and material 64% short, and this is where you're getting all the mergers and acquisitions occurring. The world is betting that America’s slowdown is basically going to put the world into depression based on this short interest, and energy with record earnings oil going to $100 a barrel. They continue betting that oil is going down to $50 a barrel. I can understand if you are bursting on the economy, but I am really shocked that financials have less short interest than material and energy, when this is where you’ve had all the subprime debt issues, and we noticed that two weeks ago when Banc of America announced earnings. The street expected $0.30, they came out at a nickel. But what really shocked us was that there was not one selling on Wall Street. Now everyone's been talking about the big bang, and all those subprime problems. And our stock has been so volatile, we don’t have any of these issues, and so the shortening of basic materials, I guess is an indirect way to think that our Global Resource Fund is going to fall off. I am trying to explain this to investors, but it's not just US Global per say, there is a general negativity towards materials and the energies. So that’s something I wish to walk you through the end of this presentation, we are much more bullish than what the market is short. Financials; let's take a look at these numbers on page 15 to put things in context. Net income for the fourth quarter of '07, Ashton manages $2.3 billion of the 14 reported, last year was at $2.3 billion. So there's been a decline. We're flat, and that’s a big advantage for us, and we're flat because we beefed up our departments. We beefed up the compliers, we beefed up the marketing to grow, because we believe in growth, but at the same time, the disciplined returns in capital, and you can see the banks devastated from $28 billion to minus -$5 billion. And we go right down the list, but basically what you're seeing in the financials are 478 companies here, and this is from a recent complication of the Wall Street Journal. The financial is down from a $45 billion plus to minus-$13 billion. So we're talking about almost $60 billion of losses, and you multiply that times 20 and what do you have, you have $1.2 trillion of foreign market account. It’s a pretty simple model, this 20 times, and you can play with that, but it gives you an idea of what's driving that, however for ourselves, we remain very healthy financially. I'm now going to turn it over to Susan McGee, who is our President and General Counsel, to give a quarterly update on some of the other exiting things we're involved with.

On October 1st, we took over the daily management of one of our 16 year old funds, the MegaTrends Fund. We changed its name to Global MegaTrends Fund. The Fund's objective remains the same, and that is long-term capital growth. However, we did change the name to reflect an investment strategy that is slightly broader. The Fund invests primarily in equity that tends to benefit from dominant trends in the global economy. We've identified investments in global infrastructure as a dominant global theme, both in emerging markets and in the developed world. We've been talking quite a bit about infrastructure, as Frank mentioned even in this webcast, and you'll hear more on that subject a little bit later. We are receiving a very good response to the Fund in the marketplace from early October through last week net flows in to the fund are equal to about 30% of the fund size when we took over the daily management of the Fund's assets. The Fund is small, but the flow trend has been strong since last October, and given the current economic conditions, it does suggest to us that investor interest in the infrastructure theme may be growing, and that presents an excellent opportunity for us, that's one of the few funds focused in this space, and we do believe that the marketplace is susceptive to this type of investment strategy. We are also working on several new product offerings, we're going forward on several new products, we have limited our regulatory constraint, although we can't discuss it with you all, we do continue to [sub-advice] to offshore hedge funds, one is focused on goals, and one is focused on energy and resources, and these funds are changing their approach to marketing, and they've hired a full time professional to lead the marketing efforts through these funds. So we're expecting some opportunity there, with some growth in assets in our offshore funds. On the institutional funds, we are working on looking at what are the key drivers for US Global, trying to increase our funds under management, and with that in mind, we're working very hard to make our funds available to investors in the institutional channels, such as corporate dealers, warehouses, and registered investment advisors. And getting in to these channels is not an easy task. It’s a grind it out process, and not just with the paper work. However, with 70% of all mutual funds flows now coming through these channels, and the fastest growing mutual fund wrap program, we're honoring a request by that firm, not to mention it by name. But the most important factor is that one wrap program has more than $100 billion in assets. The Wisconsin Education Association has approved adding our largest fund, the Global Resources Funds, to its Membership Defined Contribution Plan. The Wisconsin Education Association has nearly a 100,000 members, both are active and retired. The U.S. Global Fund family has also been selected as the preferred partner of Stern AG, a sizeable brokerage and financial services company, for offering a wide range of asset management strategy to its clientele. And we've also signed an agreement with Investor's Capital, another well known investment firm, to make our funds available to its managed clients. We're close to, as I mentioned earlier, finalizing several agreements, two are with Wall Street's largest brokerage firms, and this will give us access to thousands of successful financial consultants. We expect to complete these agreements in the near future. Additional agreements are close to been wrapped up. We have others, working midway through the many steps to reach completion. But overall, we are very pleased with our progress in our institutional channel, given that a year ago we had virtually no presence in this increasingly important part of the investment business. Now, I will hand it over to our CFO, Catherine Rademacher to give you more details about the quarterly numbers. Catherine?

Thank you, Susan. Good morning. I would like to briefly summarize our results of operations for the second quarter of our fiscal year 2008, which ended on December 31st. Earlier, Frank discussed the growth in our assets under management, I just want to note specifically that, in total our average assets under management were up approximately 19% from the same quarter last year, and up 12% from the prior quarter ending September 30th, to $5.64 billion at December 31st. And as you know, assets under management are one of the main drivers of revenue, so starting with revenues on page 17. We recorded total revenues of $13.86 million for the quarter, which is an 11.6% increase over the comparable quarter last year. And contributing to this increase in revenues were primarily three items. First of course, investment advisory fees, which increased by 12.5% to a $11.35 million, largely because of increased assets under management. Secondly, transfer agency fees increased by 7% to $2.1 million, as a result of an increase in shareholder accounts, as well as a revised transfer agent fee structure that was effective April 1st of last year, which incorporates transaction and activity based fees. And finally investment income increased 55% to $387,000, most of that increase was derived from unrealized gains as well as dividends on corporate investments. And as we mentioned in our 10-Q and 10-K filings and in our webcast, please note that the investment income number can be volatile. Moving on to page 18, expenses. Our total expenses for the quarter were approximately $10.2 million, 17.4% increase over the same quarter last year. And the three areas that contributed most of the increase in expenses, were first employee compensation, and benefit that Frank touched on earlier, increased by 18% to a partially $3.4 million, again primarily due to performance based compensation that resulted from the strong fund performance, as well as increase in the number of employees. As Frank discussed earlier, we've added some key personnel over the last year in some critical areas in the corporation for sustainable growth. And the same time we are being careful not to over staff. The second area of increase in expenses was (inaudible) fees, which increased 26% to $2.3 million, as a result of increased flows through the various broker dealer platforms. And third we have some advisory fees which increased 13.4% to $2.5 million due to continued growth in the Eastern European funds which is sub-advised by Sharla Maine. And that takes us to page 19, which shows net income for the quarter of $2.46 million, or $0.16 flat compared to $0.16 for the same quarter last year. And with that, I'd like to turn it back to Frank.

Thank you Catherine, and thank you Susan. I wanted to try and give some light at the end of the tunnel and it is not the train coming out at us, as most general media like to say by sowing fear and pain and how bad everything is. We remain very bullish, and one of the things we have shared with investors, and we look at this micro theme, and that is, we look at government policies. It's very important to see what government policies are in the most populated countries of the world, to get an indication of the sustainability of this super cycle. So out of this I am going to focus today predominantly on Chindia, but in some of these visuals, you are going to see others countries that put things in context, and it is quite amazing what's recently been announced in both China and India. The other part I want to share with all investors, investors that are listening, is that in the fourth year of the Presidential election cycle, there is an 80% probability that might well be up 8% and that's some data over the past 50%. If you want to go back prior to Chindian economics, you want to go back a 150 years. There is a 60% probability that market will be up in the fourth year of the President's term. We like that process of doing probability analysis to try to manage our expectations. With a weaker dollar in emerging markets, with prices in dollars you get this enhanced volatility, which is difficult for most investors, what I tried to show you earlier just by looking at - a growth example, is to try to use this volatility to your benefit. In a Presidential election cycle, which predominantly used to be just America's four year cycle, we are having a new phenomenon. And it's important to recognize that many of the countries of the world are having elections this year. Russia is having elections, and it goes to Latin America, and it goes to Africa. So we are seeing the synchronized election cycle. And what politicians all want to do is to stay in political power. So, they will do everything at the group of seven. The seven dwarfs, they recently had their meeting, that was a joke, that the G7 was right about the economy, and they are all doing everything basically to pump the economy to stay elected. So, let’s take a look at what’s going on with Asia on page 21. Estimated infrastructure or spending in 2007. These are just huge numbers dominated by China and India. Projected growth in infrastructure spending for the next three years basically, which has really been turning on is, that Indonesia in percentage terms, is exploding. And with the change in their policies to attract capital for drilling the oil, Indonesia’s oil program is exploding, and is giving them more capital to be able to buildup their infrastructure. India is also in percentage terms from our low base, but the second most populated country in the world is experiencing a huge percentage of increase in spending on infrastructure. And the importance of infrastructure spending is that, infrastructure spending lasts for 20 years of job creation. So when you go through the list of who's most developed, you see Taiwan, Korea. So in percentage terms they are not spending as much as Indonesia, India, China, Philippines and Vietnam. Hong Kong, is basically spending between 2.5% to 5% GDP from the past six years. They’ve announced some recent policy changes that they are going to pump up their spending. And basically, they are going to increase their infrastructures spending by 50%. Now that's significant for just a city center to go ahead and spend numbers of $25 billion on infrastructure, and basically Hong Kong is going to spend 7% of their GDP on infrastructure. Let's hop over to page 22, China's current five year plan. Estimated infrastructure spending for the 11th five year plan to 2010, we update this on a regular basis; this five year plan is almost a $1 trillion. Expressways are 24% of the budget, and railways are 22%, power generation combined with [easy] makes up basically 34% of the budget. Page 23, India infrastructure spending is up 130%. India’s current infrastructure spending under the 11th plan, is almost $500 billion, and that's up a 130% from the 10th plan. Power, roads, telecoms, rail investments to double, allocation for airports quadruples, and 16% increase for ports. This is what China did 50 years ago. It's quite a big influence - ability, but a very focused effort in the spending on sea ports. And what they did is create tax-free zones. Well India is now creating all these tax free zones to beef up their ability to move products in and out of their country. China electricity plans, page 24. Very important for copper, the demand for copper is 60%, the worlds' demand for copper is going into the power grid, and anything for electricity in China, and as you can see it's not stopping. And with the recent snow blizzards they've had in China, China on last week announced to all the banks to basically open up spending and not to slow down their economic activity. So turning over to the next page 25; India's electricity plan. The previous five year plans in India has grown power capacity by 20,000 megawatts. Under another plan India is to expand capacity to 78,000 megawatts. That again is underlying demand. So as housing slows down in America, and the copper demand slows in America, it is being picked up by this huge expansion for electricity in the two most populated countries of the world. Next page is 26, India air travel is flying high. Domestic passenger traffic enjoyed a 30% compound annual growth rate between '04 and '07. International traffic is up 16%. Airlines have 240 aircraft, with approval to add 400 over the next five years. So domestically you have to look at Boeing. It's going to be making airplanes and jets for India, besides China. Airports being developed with private participation are another new infrastructure build out to fast track the processing of getting capital in Delhi, Mumbai, Hyderabad and Bangalore. Airports in Chennai, Kolkata are being modernized, 35 modern metro airports are to be built. Recently when I was in India, I was so impressed with their subway system in Delhi. It really was clean, spotless, and quiet, and moves people quickly. One report is that they are going to expand this dramatically. Page 27; just a touch of imagination of what's going on. India and China at the far left hand side are moving in the direction of the right. Some very simple, great policies are the catch-up to US and Germany. So do the comparisons, and look at the policies and do this catch-up. So China is at 43,000 kilometers of expressway, and I think India is with 25,000. China needs four times existing expressway to reach Koreas' density. India needs six times more just to catch up to Korea. And so with that, when you build these new roads which are basically been built everyday as we talk, are cars. So China has just over 15 million automobiles against the population of 1.3 billion. India with 1.1 billion has only 26 million automobiles. U.S has a population of 300 million with 248 million automobiles. So let your imagination be captured by this in the copper consumption, in steel consumption. If you want to make steel, you need coal. You need coal also for energy for utilities. Next page is page 29, and I think it's just quite remarkable that the Tata Empire has come up with a NANO car, $2500. So how they are going to be able to have more people to enjoy the ability to move around, is to get it down to what the income levels are. So when you have a big people, and all of a sudden 300 million people, the whole population of America, as the equivalent of college education, and are making more than $5,000, you are at a kicking point on the consumption of products, cars, insurance, and etcetera. So this is extremely bullish for India, who wants to have these ports I mentioned to you earlier, so that therefore they can ship cars to Latin America and to Africa. So these are the facts that I wish to share with investors that make me very comfortable that the securable market is not ending, policies are in place for a sustainable growth, policies are now being embraced by the G7, and in America to reignite the economy, to get it going again, and this is very bullish. So looking at previous cycles, when you've had financial difficulties, like the S&L crisis, etcetera, that sector will take several more quarters before you get the true bottom, with a write-off, but the market should bottom in these next quarters and away we go. So, I remain bullish, but for investors, please recognize that the volatility is to be managed, and with that I would like to end the presentation

Okay. Frank, I appreciate that. This is normally the time that we reserve for our questions-and-answers, we did have a couple of early questions, sent them. This is regarding expenses and revenue, which Catherine and Frank discussed at some length during their presentation. Seeing no further questions, Frank, do you have anything else you wanted to say?

No just wanted to thank everyone for the patience during the technology glitch. And stay long in this great country of America. And diversify, looking outside around the world, and not be afraid of that. We publish regularly pieces, if you haven’t signed up for the Investor Alert, then I highly recommend you to, and that you listen to webcast to become more informed, so that when you make a decision to diversify into funds, then you really are making an informed balanced decision and thank you all. Thank you Catherine and Susan. Thank you Terry.

Okay. Thank you too, Frank. This concludes U.S. Global Investors earnings webcast for the second quarter of fiscal year 2008. This presentation will be available for replay on our website that is www.usfunds.com/webcast. And thank you all for your presentation today. Back to you operator.

Thank you ladies and gentlemen. This concludes today’s teleconference.