Ann: Exploration Update - Noombenberry Project, page-118

It's very frustrating to see the share price movement today but it is understandable based on the results and the expectations that have been set. LRS has been set up with some very very high expectations - calling it the next ADN, and the fact that our first batch of results were actually pretty amazing, people are expecting every result to be identical or better. Let's be realistic here, no matter how much we want it to be so, it's not like high grades of halloysite is going to run in every direction of our tenements for km's. There are going to be areas where it will taper off and areas where there will be high concentrations.

Today's results are predominately from the south east section of this area. The first results were from the north west section. I have marked today's 20 sample results on the same image I did on first results. Yes, today's results seem pretty average compared to the 1st batch - and hence the sell off of paper handed investors who have no idea what the results actually mean. We have 8 holes where no halloysite is present. But we also have 4 holes dispersed in this batch with some pretty good grades >80 ISO and >10% halloysite.

We only have 25% of the results come back, so there is still potential for these high grade results that everyone is expecting, and I feel the concentrated areas point towards the middle of this tenement - based on holes 11, 12, 15, 55...

The other thing to remember are the holes were drilled 200m apart - think about what that means for a minute. What do you think will happen when we isolate the areas with the best grades and then do in-fill drilling, which we are already funded for? OAR drill grid pattern was 100m.

We have come back with a few holes that don't have halloysite and people are calling the company fraudsters, and a dog stock!? I just don't get it.

We need to all temper our expectations and think about the bigger picture:
- we have started with an 18sq km area proven dispersed with high grade halloysite
- off-take discussions are in the works
- 75% of the drilling results to still come back
- in-fill drilling to occur
- JORC mineral definition to be done
- more tenements 7km and 15km with confirmed high grade halloysite
the list goes on.

I will be holding until all the results come back and JORC definition is completed, to make a more sensible decision.