Ann: Makabingui Gold Project Update, page-41

Hi Will Appreciate your input, but the $683 you used does not I believe include the Senegal Government Royalty or contribution to community of 5.5% which is calculated on gross revenue receipts. If this is the case, instead of using a gold price of $1500, I used used $1,417.50 (94.5%) in my calcs. This cost, presently $83.00 ($1500- $1417) equates to a cost or adjustment to revenue equates to US$10.14 per tonne. So I find it hard to conclude that Management have included it in their reported $678 when the total General and Administration cost they used was US$10.60 per tonne.

Also, based on Pit 2 figures in the latest report and given current processing capacity of 300,000 M/t per annum, with say a recovery rate of 95% @ 3.8g/t, I calculated the total likely ounces to be produced in the 1 st 12 months to be 34,819 ounce of gold. ((300,000 X .95)X 3.8)/31.So I am not sure how you got your 55,000 ounces.

My estimate was based on BSR staying in Pit 2 for the whole of year one, which they could actually do as based on present processing capacity it would take longer than 12 months to fully exhaust 51,000 ounces from Pit 2. However, there is some chit chat going around that management may go into Pit 1 with the higher g/ts before Pit 2 is exhausted. If this will actually happen and when I do not know. So I am unable to considered this option, which if true could increase total ounces produced in first 12 months.

As for the $50 million recovery of BSR's previous exploration costs I do not believe this will have any effected on BSR's eventual reported profit share from activities presently 63%. It would however improve BSR's overall liquidity. I really do not fully understand the terms of the agreement between BSR, WATIC and the Senegal Government or seen any recent Financial Statements of MGO so I really cannot say exactly how this relationship will be reported. All I can say is that any potential BSR investors will only be interested in BSR's share of the reported profits and BSR's Assets and Liabilities. For instance, the contingent tax liability BSR has been reporting for the past 3 to 3.5 years would be of no concern to the subsidiary MGO and would not appear in any Financial Statements prepared and reported by that company in Senegal. It is the Holding Company's Liability completely. I am not sure how or even if future remuneration paid to the Board Members of MGO will be disclosed in BSR's Financial Statements. We will all just have to wait and see what comes out when the consolidated updates and reports are released once production starts.

As an aside, if BSR's production capacity remained the same, it would take 42 years for all the estimated 1 million ounces in the Makabingui gold prospect with a reported 2.6g/t to be completely recovered. I hope an significant upgrade of capacity is planned at some time in the future or I definitely won't live long enough to see it.

Good Luck to All and Hang in There