Ann: Appendix 3B , page-6

The saddest part of all, the $35,000 is only going to be for a small portion of working capital purposes.

Usually burn around 900k to 1.5M a quarter.

Given cash position of about -$11K from last quater, LJ could possibly convert anything from about 30M to 50M in shares just to cover July-Sept working capital expenses of RCP of around 900K to $1.5M. - The company cannot afford to carry debt.

Potential to increase shares on issue to around the 200K mark (around 20 to 30% increase in total shares) with very litte to show for it. One would have to question if any drilling will occur this dry season given strapped position and potential for substantial further dilution - Announcements by RCP appear carefully worded regards drilling occuring.

Without a finance package to get into production this dilutuion by LJ will continue. I would not expect the board to approve a drilling programme without a finance package being arranged as borrowing from LJ will only magnify the LJ problem - Conversion of shares at a 20% discount then dumping to the market.