salt creek re classified as indicated resource, page-4

The JORC code had different levels of confidence in relation to resource estimates - inferred, indicated and measured. It also has a classification call ore reserve - this is the amount of ore that is known to be able to be economically extracted in mining and is classifed into proven and profitable. Basically the higher the level of confidence the more 'bankable' the resource quantity.

The JORC code says inferred resources can't become part of an ore reserve they have to be indicated or measured.

To get to higher levels of confidence requires additional infill drilling to show that the resource is continous over an area.

IGR have modelled the resource based on the current drill spacings which are already quite close, and run random scenario's based on possible outcomes of the undrilled in-fill, and the results show that infill drilling is unlikely to cause a reduction in the inferred resource thus the confidence level can be considered high and much of it can be re-classifed as indicated. This situation comes about partly because of the consistency of the resource in the current drilling, the conservative approach they've used to model the in-fill areas already, and the disseminated nature of the resource which gives grade consistency over large widths rather than small nuggety pockets of ultra high grade resource.

By converting a lot of the resource to indicated it means they can have more confidence in pit design etc. and can also convert a portion of these indicated resources to ore reserve once they've worked out the economics. That will feed into feasability and also ability to obtain financing etc.

(my laymans understanding only - don't rely on it)