Terry Badger - Director of Communications Frank Holmes - CEO and CIO Catherine Rademacher - CFO Susan McGee - President and General Counsel

Welcome to US Global Investors exclusive webcast, US Global Investors Third Quarter of Fiscal Year 2008 Earnings Announcement. Please note, that the slides you see on your screen are controlled by the presenters. Also, you may print a copy of today's slides at any time by clicking on the Print Slides button on your screen. A question-and-answer session will follow today's presentation. (Operator Instructions). We would now like to begin by introducing Terry Badger, Director of Communications at US Global Investors. Mr. Badger, please begin.

Thank you, operator. Welcome everyone to our webcast announcing results for the third fiscal quarter of 2008. Our presenters for today's program are Frank Holmes, US 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 US 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 ladies and gentlemen to today's presentation. I want to read in and out in this presentation as we go to page 4. If we could move to page 4 and highlight some of the differences that we are seeing between revenue and net income and earnings per share. As you can see in this financial snapshot, which Catherine Rademacher will go in to more detail in a few minutes, the revenue decline. Now let’s look underneath the core, look at our core revenue as the expression is let’s look under the hood. And what is important here is that, our offshore fund business, which is growing, which I will show you in assets, was basically flat for the quarter in performance fees. And that is the big difference between revenue a year ago to this year. Net income as you can see was $2.12 million versus $2.41 million, which drops down to earnings per share of $0.14 versus $0.16. We have several investments which are made a long time ago. They can have some volatility to earnings and for us, we want to highlight to you, that our core business, our mutual funds, business is basically growing and that loss in earnings on a year-over-year basis really happened all in a couple of days in March, as junior companies were knocked down due to the liquidity event at quarter end. In fact a year end for a lot of the brokers at the end of March and we witnessed this and this impacted us for the earnings. But if I look back a year ago, this was positive to us. Looking at these several small investments, which were liquidating in up days we are trying to capitalize on. However, the core business is actually on a year-over-year basis for us, is positive, and that’s what we want to report to you. Now lets go to slide number 5 and try to breakdown compared to how we are growing. We are very happy to see that in the past three years our compounded annual growth rate, the CAGR is at 37% compounded growth rate. The offshore client's funds, assets have grown 276% over the three-year compounded annual growth rate. And what's interesting here is that the assets did grow, as you can see. But the performance fees this past quarter, really did it. And there is reasons for that, is because the micro-cap, small-cap category, which these funds focus on, were basically down for most people. We were thrilled that we were [back] or flat. There are funds and offshore funds that in this space, they were down 25% for the quarter. I'll also show that we're basically flat to up 2%. So, from that end, it's not enough to get a big incentive fee, which I mentioned to you a second ago, but it does give you an ideal leverage. We are starting to see better performance coming in this quarter, after the massive injection of $800 billion by the Federal Reserve to kick start this economy. Hopping over to page number 6, is assets under management. As you can see, the quarterly growth is sequential for us. It took a dip only because of market volatility. But overall, we are very-very happy when we compared this to our peer group, which I'm going to give you some comparables too. But an overall assets under management, we had several leaders March end quarter, for our complex, there is a boutique, unique small group of collection of funds competing against over 6,000 funds. We had several funds. Once again, we're in the very top of showing strong leadership. Next page is 7, this fund recognition. We've been asked a couple of times ago back, since this great super cycle started and I took on the range as the Chief Investment Officer. How many awards have we own? And basically we have won, and basically we have won 26 Lipper Fund Awards and Certificates since 2000. So for a small boutique, a unique asset class, we are very proud of this. And what's also a very important is the big picture, the big picture of mutual funds and the growth is in fact international funds. This is the category that's growing and this is the category where we demonstrate leadership and resources, as oil reaches to $120 a barrel, and growth in the emerging markets. Hopping over to slide number 8, shows you that at year end Global Resource Fund was the best natural resource fund out of 75 funds in consistent returns for the past five-year period ended December 31st. And World Precious Minerals for the best gold orientated fund, out of 44 funds and consistent returns for the past five-year period. And what's interesting that, World Precious Minerals for this quarter does not have that great leadership, is because of its exposure to the junior mining companies that are undervalued, it doesn’t matter in a liquidity event, they have been knocked down to way under historical valuation, which put them as a very attractive. However, it does put a lag and we saw this happening last August, this bifurcation between big cap and small cap and (inaudible), short-term impact. But we feel very comfortable about where we are, and the valuations we're being able to look at stocks are extremely attractive. Also which on the page 9, I'd like to highlight to investors, is not just resources that we have a unique expertise in our processes. Our process have largest of the share fair value showing near term tax free as the best achievement fund for our short-term intermediate bond fund. In fact now the yields on this are much stronger than money market funds. And so, we are very happy about this particular fund and we are also very-very proud the fact that we can deliver alpha, not just in one asset class, but in several categories. Hopping on page 10. And I am sorry, I am really laboring on this thing on our fund performances, not so much, a [priority] to brag to about it. But it's much more than this what drives our business model. If we don't perform, assets do not flow to us. So it's very important for us to highlight the key value drivers, whole equation is performance, performance, performance. And you can see that seven out of nine US Global Equity Funds appeared in the latest Wall Street Journal rankings as top performing funds. Next page is 11, showing you the fund performance, going with the all the natural disclaimers you have to have in disclosure statements. You can compare those different funds. As I am going out of page 12, also to point out to you that this was taken over the Holmes Fund, used to be the Bonnel Fund. We have outperformed the benchmark using our processes. Focusing on that return on capital model, looking for that 20% minimal return on capital, looking for companies demonstrating a mezzanine growth in the cash flow earning of at least 20% and revenue top line growing at 10%. So that sort of discipline and that global reach has been shown at alpha in many of our different funds. The branding strategy, we continue to on page 13, is the highlights regular being on CNBC, on Bloomberg, [Communion] Markets, and giving a big picture, big theme this branding as education. As we mentioned last quarter, we won several awards last year for our education and now we have come with a new share report that goes into great detailed infrastructure. Operating cost continues to grow, it's globetrotting, from the books I have read. Articles I think that are interesting to me, which we discussed in portfolio and sharing that with the public. And you can subscribe to that and the Investor Alert also continues to grow as a medium, every week as a discipline by the portfolio team. Looking at the strengths or weakness of the past week, just like a professional basketball team looks at the game film for last week’s game, and they look who they are going to play next week. We do the opportunities that stretch for next week and that discipline shows up in the Investor Alert, which goes out every Friday. Hopping over page 14, is newsletter support. More than 1 million newsletter subscribers have feature stories on our funds and what's different about us, what is unique about it and different themes of how we are key players in that space. This has been an important factor because most of these people that subscribe to these newsletters are paying money. And people that pay money, actually they pay much more attention to the advise and the commentary by these newsletter writers. This shows up in, as you can see on page 15, I would like to compare this to our peers. How are we doing relative to our peers? US Global year-over-year is plus 13%, our peers are plus 8.4%. On a quarter-over-quarter, US Global is minus 2.5, whereas Lipper was minus 4. So we outperformed in the assets under management growth. This is important for contextual thinking because I am going to show you some other visuals that this is a rewind of how the share price has acted in light of our asset growth and some other factors when you look bottom up at our stock. Earnings, let's compare our earnings to the Lipper peers. US Global Investors net income was minus 12%, and as I highlighted to you, our core business is in fact up on a year-over-year basis and the fluctuations in the market impacted that. But when you take a look at Lipper peers, they are down more than 15% and some have had massive, massive losses in this whole subprime debt debauchery. Next page is return on equity. We are very proud that for the shareholders, we run a very lean mean funding machine at low base and high bonuses right across the board. As you can see that our returns on our equity are much greater than our Lipper peers to one year and the three year compounded is still substantially greater. Next page debt equity 18. Why are we showing this? Well, we notice that most of the Lipper peers are 48% leveraged, in this whole fear of what's taking place with the debauchery of subprime debt in the marketplace. There has been a focus from looking at income statement to analyzing balance sheets. Well, when we look at our balance sheet it's pristine, it has no debt. We've highlighted, commented before that we do not have any subprime debt products, and we are very paranoid about this whole issue and so with that, our equity base is much healthier and we have very strong free cash flow. This goes on to the next page, is the asset growth opportunities, and I think it's important that you see that this is the future and these are significant changes and I'm going to turn it over to Susan McGee, our President and General Counsel.

During the first quarter of 2008, our institutional services team completed several negotiations with significant distribution partners. As we've discussed with you previously, one of our top priorities, starting in early 2007, has been to increase our share fund sales intermediary. This does reflect a trend in the industry. According to the ICI, approximately 75% of new money coming in to mutual funds, is coming in from the so called advice channel, that is financial advisors and other types of intermediaries. For a brief overview of some of our more significant distribution arrangements reached during the quarter, one, includes Merrill Lynch. There are 16,000 financial advisors in Merrill Lynch, that are now able to invest in US Global Investors' Funds. Last year, Merrill placed nearly $100 billion in nonproprietary mutual funds. So this is obviously a big win for us to get our funds in front of these advisors. We are also having a distribution partnership with Morgan Stanley. Morgan Stanley has more than 8,000 financial advisors, and these advisors, on average, manage $85 million for the clients. We also reached an agreement with Linsco/Private Ledger for a new platform arrangement with them. And it does provide US Global Funds with a more attractive placement within the array of funds within LPL. LPL is the largest independent broker dealer in the country. So when you combine Merrill Lynch, Morgan Stanley and LPL, this gives our institutional sales team access to nearly 30,000 financial advisors. In addition, there are 90,000 members at the Wisconsin Education Association, who are now able to invest in our biggest funds, the Global Resources Fund, in the retirement account. We are now [disagreeing that] previously in our last quarterly webcast. We are very, very pleased with these distribution agreements. However, we are not resting. We are in various stages of discussions with a number of large firms across the investment sector, some consultant, some private client managers, and others, that we've identified as having good potential for us to make agreement with.

Thank you, Susan. Moving on, I gave you the past and Susan has given you sort of the future opportunities, what's important when you look our strategic insights, which attracts this industry, that money flows are going into international funds. Basically the psychology in America is getting away from, only America is the place for opportunities and growth. Jodi Solison's recent book, basically highlights that the growth opportunities are in China, India and emerging economies that embrace policies for peace and prosperity, and we are in those asset classes. So I think that our future looks very-very healthy and big factor is this performance which hopefully. We will stay focused on our processes that's always the thing like a coach has of a professional team. Focus on those processes, I believe, that we will be able to demonstrate very good fund performance relative to our peers. Well that's the past and the future. Let's take a look at rate today. What's happening in the market, page 20. In the past year, the S&P versus the Russell 2000. In the past months, I have attended several conferences as a student. Particularly, hedge fund conferences in Europe and I want to highlight the shareholders what took place last August. There was a margin call made by the banks to the prime brokers, that it wasn't just to sub-prime debt hedge fund managers. It was to every form of hedge fund manager. If you have a $2 trillion industry and some of these hedge fund managers leverage 10 to 1, and on average more than 2 to 1, and all of a sudden due to the bank's mortgage problems, they start pulling in capital from everywhere they can get. They go to the prime brokers and it wasn't as I said, one asset class with the problems that are coming from the bank. It was all asset classes, ran to the door at the same time. And when you take a look at volatility, S&P, it was calculated liquidity. The S&P volatility (inaudible) with the Russell 2000 and we are in the Russell 2000 index, so it has been hammered even more with greater volatility. We want to put this in context for you to understand that the Russell 2000 earnings are better than the S&P 500 overall. However, the liquidity, has impaired this and I think it looks like an opportunity for the Russell 2000. Now let's take a look at the GROW versus the Russell 2000. Here is the greater anomaly, on page 21. Looking for one year, we have far underperformed the Russell 2000. Financials have also been hurt in the Russell 2000 like the S&P, because [CALL ENDS ABRUPTLY]