Ann: Shoal Lake Gold Project - Shareholder Presen, page-8

re: Ann: Shoal Lake Gold Project - Shareholde... Hi mahanga,

Shoal lake reminds me of the many attempted mine revivals of high grade golod in Victoria and Charters towers, Queensland in the last 10 years. Just have a look at whats happened in the famous old hard rock mines of Morning Star, A1,Rose of Denmark, Cohens reef at Valhala, Bendigo mines ,the collosal cock up with Lihir at Ballarat which was bought out by the minnow CGT who had been trying to revive the old Castemaine goldfields. CTO has been the joke of the asx goldies at the historical Charters Towers goldfields. All these have caused much grief to many shareholders, with many failing to manage these developements well.

Shoal lake is risky, make no mistake. If you do some resurch on these you will find more disappointments than succeses. The only thing going for Shoal lake is the relative increase in the POG since the last serious exploration, but that has been the case on many of the Australia examples which have flopped also.

I would be concerned with the closeness of processing facilities and suitability for the ore types more than anything else. Not much was said about the geology of the ore bodies and the condition of the old mine workings. I found the clause of the 50% bulk sample revenue or 5 mill, which ever is greater as total bullshit.

Until I see what exactly was the big problem at Ze Vermelho, I will not be contributing to anymore ventures with this management. From all accounts, Ze vermelho should still have most of its gold still unmined with good infrastructure to bring it to the surface. The announcement mentions the closure partly due to Brazilian operating conditions. I wish they could have expanded on that because at Shoal lake they will face more mining compliance and a harsh winter.

Anyway the Brazilian assets are on sale. To be totally honest, I see more risk in Shoal lake than holding onto the Brazilian assets and hoping for an increase in the POG to make the operation viable again, but I guess management need to be paid their salaries.