Ann: Quarterly Activities Report and Appendix 5B, page-11

IW, oh yes, you are probably spot on, but now let me give you my assessment of the Ann.

The technical part of the project seems to be moving along, perhaps a bit slowly for some which may exacerbate a cashflow problem. And as I have said on previous occasions, if you throw enough money at them, engineers will build you just about anything. I have almost no concerns here.

Now with the short-term money supply, I sure share your concerns. I would like to add another dimension to the discussion.

1. Item 8.3 - Second Quarter expenditure: $7,503,000

2. Item 8.6 - Available Funds: $5,618,000

3. Without an injection of funds, there will be a shortfall of cash if expenditure in Third Quarter is the same.

4. They say "no" and are going to cover this shortfall with cost saving initiatives. This, in my view, is a serious situation. See your above post.

5. Now another perspective on cost saving is that they might also embark on some other draconian method such as senior executives forgoing their salaries. There are precedents. Either way, this might not be a good look in the eyes of the investors.

6. As for the $5 million R&D Rebate, government departments can be a little tardy when it comes to handing out cash.

There is too much of this type of talk. "Item 8.8.2 - The entity is also engaged in further discussions regarding a number of additional funding options".

How will this be viewed by potential partners.

For me, I am disappointed with the Announcement. Come on, guys, give us some alternative views.

J L.