Ann: Star Mountains Update , page-2

Not a bad result for the first hole at Kum Kom and just a shame there is 140 meters of overburden before reaching decent grades. Of the 348 meters drilled 154 was in mineralisation with average grades of .78% copper and .29g/t of gold. Hopefully this deposit extends to the surface somewhere close and makes it amendable to a large tonnage open cut operation. What surprised me is we received these results before the previous holes drilled at Futik, Pad48 and Rattat. There is still results to come for 422 meters at 004FUT12, 601 meters at 003PAD12 and also 600 meters at 001RAT12 but a suspect the assays wont be as good as Kum Kom.

If as the company stated they could find say a 100 million ton deposit with grades equivalent to Ok Tedi at .89% Cu and .97g/t Au this would produce $9 billion in sales revenue and $4.35 billion in pre tax profits using Ok Tedi's 2011 production costs. I also see no reason why if it became a funding issue that PNGSDP which owns 63.4% of Ok Tedi and 13% of Highlands wouldn't support the project, after all they received $200 million in dividends in 2011 from Ok Tedi and wouldnt want they kind of revenue to end. Been told to expect more results in the quarterly.