Ann: Strong Resource Growth at Paulsens Underground, page-64

In my opinion the mining guy from the YouTube video was wrong with his whole dilution theory. He stated that the resource was based on the thicknesses from the vein drill results and said that when a minimum mining width was used the resulting head grade would reduce dramatically. For example if the vein containing the gold was 100mm thick at 15g/t then when mined at 1.5m the resulting head grade would be 1g/t. He went on about this. If he is right the mine would hardly be viable. But on page 6 last paragraph of the resource report it states that the resource was based on a mine optimization which used a mining width of 1.5m and used geological blocks of 2m thick(previous paragraph). So the way I understand it is that the 322000 oz resource at 10g/t is after stope volume is taken into account. It does state that normal dilution from over breaking from blasting is not taken into account but this dilution is normally only about 5 to 10 percent additional rock which dilutes resource grade by the percentage. The report said this would be taken into account in the study. Anyway this is my understanding of the issue.