Ann: Completion of Initial 2010 Drill Hole at Mou, page-15

re: Ann: Completion of Initial 2010 Drill Hol... Gralf,

That's exactly my interpretation and why I advised GUN holders to keep an eye on AXT in my post back in October. Both companies are potentially sitting on the Holy Grail and now Xstrata is in control of the drill program to find it. I have been in AXT since IPO and after today, back in the money.

For those who are not so familiar with AXT and how it plays with GUN, I have taken the liberty to cut and paste a few announcements:

http://www.asx.com.au/asxpdf/20100212/pdf/31nnrhqlwpynpr.pdf
This was taken from GUN.AX?s announcement 12/02/2010

http://www.argoexploration.com.au/pdf/13_05_08/18th%20Apri%202008l%20ASX%20release.pdf
http://www.argoexploration.com.au/pdf/Media_Release_05%2005%2008.pdf
These were taken from AXT almost two years ago.

From what I understand, three of AXT?s holes IADH 2, 3 and 5, have intersected what appears to be a flat mineral complex at a depth of around 392m on a continual line stretching about 2.5km from the boundary of the GUN.AX license area. According to AXT, this could be economic. Because the gradings along this line are of a similar magnitude to those of the nearby Emmie Bluff complex (1.3% Cu and 0.06% Co), it seems reasonably fair to assume that AXT?s drill intersections are a continuation of the Emmie Bluff complex in a northerly direction. Emmie Bluff is said to contain 24-25MT at 1.3% Cu and 0.06% Co

If we assume that the Tapley Hill Formation is at least 2.5km long (from the boundary), a purely speculative estimate may assume that it is also 1.5km-2km wide (as per GUN.AX?s diagram. If we use an average of 1m for depth of this formation, and a specific gravity of 4-5, this turns up about 20MT at roughly the same gradings as in GUN's tenements. Back of the envelope calculations would assume an in-situ valuation in excess of USD2bn.

But look further, how interesting are the readings from the old MIM SAE6 hole which encountered a 15m thick basement hematitic zone, averaging 1.2% copper intersected between 931 and 952m, and AXT?s intersection of 1.0% copper between 939 and 951m in IADH5, as per the May 2008 news release? Can one assume that these intersections are also of the same mineral formation, stretching between the two tenements?

I don't have the answers, and have tried in vain to get a geologist to explain it to me, but the TEM readings and intersections alone have clearly given Xstrata the confidence to continue to probe.

It is why I have been more excited about MG14, Windabout and this whole area for GUN rather than Coburn. Drilling alas, is tediously slow and it's been a frustrating journey. I hold both shares just in case one doesn't produce the goods, but that said, let's not lose sight that MG14 and Windabout are more than economic in their own right and should point to multiples of GUN's current share price, before one considers what may happen at Coburn.

G