Ann: Severn Drilling Update, page-2

A bit disappointed that ZS152 did not "get the chocolates" but it will be interesting to see what that last 125m holds as far as copper, tin, etc. It will most likely be placed on hold for another day when funds are more readily available?? As stated, there is a very good probability that there are tin lenses / other resources around the area but it would take us away from our focus of extracting value from our current position of creating shareholder value.

Now that I have a some spare time , I thought that I would share some more of my personal observations including some points from a good discussion with Gary Fietz several weeks ago.

# My impression was confirmed that this is not a lifestyle company & management are keen to get the best value from our tin project. It was discussed that $50 million has roughly been spent over the years & they would want this value back for shareholders if a predator was to emerge (in one possibility ??). Money is being wisely spent trying to give value with drill hits or a progression to the DFS. i asked if we were members of the ITA and he made the point that it costs $20K per annum - they would like funds to be spent in more productive manner. It is nice to see that the ITA do report what milestones we do achieve for free.

# The old Granville tin mine down the road is in need of a lot of work (assessed by a consultant engineer) but the interesting kicker could be the tailings dam which could quite easily come into motion if the circumstance arises??

# The smaller Dizier resource has only about a 60% recovery rate & is likely to come into play if the tin prices are a lot higher. Severn & Queen Hill have about 90% recovery rate & are the main focus. Same mineralogy as our neighbours & the main focus. I personally think that international or local interest will arise later next year when we have more data from infill drilling / DFS / etc.

# Small resource at Razorback but the team have a theory that there is deeper south plunging potential which requires further exploration at a later date???

# Concert Creek / Carbine has taken a priority on exploration especially compared to the Scamander / Pinnacles terrain - looks very interesting as it was previously held ground that later went to Yunnan (MLX's partner) & now it is back to us again. Gary stated that they would wait to see what Tin One gets from their deep drill holes which are currently in progress before deciding if SRZ proceed in the Scamander / Pinnacle area - we do have a current MRT grant which is valid for about a year but it will cost us about $360k. Obviously the focus is on the phase 2B drillling, DFS, highly prospective Concert Creek target, etc.

# Gary was disappointed that tin prices had dropped as he thought that we were progressing well. Tin prices have now increased back to about $24k (US). I personally think this is the minimum that we require to make this a robust project. Our competitors are having lesser results / recent drill intercepts such as First Tins Tellehauser project (about .3-.4% at about 700-800m) is not cutting it & Tin One's Pyramid project has similar from shallower depths (interesting that Tin One is now driling their deeper targets their share price did move upwards several days ago. Keenly keeping an eye on this as we have the two larger adjoining area's with possible better deeper targets ??). It personally show to me that we have a better chance of getting to development than our competitors at this point.

# Adjoining NE neighbour's (FG1) reported a nice intercept several weeks ago of 12.3m @ 16.8g/t which shows just how prospective this area can be. They have just announced a $6.1M cap raise & have also gathered an extra tenement in the NE area (Warrentina). FG1 & SRZ now have very dominant landholdings in the NE area.

I am in for the long haul but do acknowledge the risks & the opportunities that this company with the low market cap - existing resource holds. Happy festive season & hopefully a more prosperous year for shareholders !