Ann: High Grade Gold Vein Intersected, page-6

Hi Guys ... and not really what I was hoping for, or even expecting. The grades and intercepts are not very exciting or economic. The only positive for me, out of these results, is the pervasive and widespread extent of the low grade mineralisation and the fact that it is exhibiting classic porphyry mineralisation zonation characteristics. The fact that there is also a narrow (1-2 M) near vertical high grade gold and silver vein (hit in both drill hole 18 and 19) is also encouraging and supports the overall porphyry scenario.

All of this suggests what we already suspect and that is that there is a seriously large mineral system at Chanape. However if I am honest, I must say that, in terms of specific and potential breccia ore grades for this specific breccia pipe these results are underwhelming. As I have said previously, not all holes will be "gangbuster" or of an economic grade but together they will all add up to, and contribute to the bigger picture. Also not all breccias will be seriously mineralised but the fact that there are significant (if not ore grade) and widespread anomalous assay results does suggest that there is something serious here .... bear in mind we are talking about a 2-3 km square area (with plus 1.3 km vertical depth) and not all of it will be economically mineralised.

The major plus out of this is that there extensive and pervasive mineralisation in all holes which suggests that there is indeed a big mineralised system at Chanape and with further drilling there is a good chance of hitting the sorts of ore grade intercepts that we all want.

So, in summary I am disappointed that these holes have not replicated some of the earlier grades from previous holes but encouraged by the fact that the whole mountain seems to have extensive mineralisation and alteration assemblages that are indicative of a big mineralised system at depth ...... all the more reason to get those deeper holes into the porphyries and where they had the big IP chargeability anomalies.

As I have said previously, one drill hole (or in this case 3!!) does not make a mine, but I had hoped for more than this.

Still, we are in a marathon rather than a 100m sprint and we need to be patient. The good thing about these results (apart from confirming the widespread nature of mineralisation and alteration at Chanape which in itself suggest a big and classic porphyry system at depth) is it in no way diminishes the expectations of there being a decent ore body here and will also help the company fine tune the next round of drilling.

I am still a believer that we have an elephant here but I do admit to being underwhelmed by this lot of assay results, although it was probably too much to expect that every hole would be a winner. I don't know of too many deposits where every hole has hit the motherlode but they all add to the picture.

Just means that we have to hold faith and be patient. I am pretty good with the former but not that flash with the latter!!!