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Hi Chris

Just wanted some clarification on company direction. There seems no doubting the gold resource and potential that IGR has in its tenements and it would seem more than fair that this is the direction that the company has moved in. My question is why was the VMS target drilled? The focus according to many of the released statements has been to find the extra 100K gold resource. Would the money spent on assessing the VMS target not have been better spent on firming up gold resource? This would then mean production date could be achieved earlier.



Thanks for your time

Ash


CC Reply:

We are having some very substantial success in our stated aim of identifying an additional 100,000 ounces of production - we may be well past that point by now and still finding more! As a general comment, I don't think the market has a good appreciation of how significant the recent Salt Creek discovery wil become, this will change as we release more results - results for 13 holes have been released and we have drilled over 40 holes to date and will continue drilling for the foreseeable future. Much more commentary will be provided in the quarterly due out within two weeks.

As for KZ5, while our primary focus has been finding the additional 100,000 ounces, this VMS system is very large and has a very attractive metal mix of zinc and gold. The currently known system extends for 2.5 kilometres long, is 20 metres wide and is sub-vertical (ideal for mining) and could extend for over a kilometre in depth - it is a very large system. While the grades we have seen to date will not set the world alight, we have only seen disseminated sulphides. These systems will have a massive sulphide 'core' and we expect very much higher metal grades in that zone. We have yet to see any massive sulphides but these systems are zoned in terms of sulphides and alteration minerals and these can be used to 'vector' into the massive sulphide zones. The drilling we completed recently was very wide spaced and was designed to provide us with the ability to 'vector' based on the sulphide and mineralogic attributes as well as using down-hole geophysical techniques. Down-hole EM has just been completed on these holes - again, more commentary in the quarterly.

But, the crux of your question is why did we drill KZ5? Basically, the prize justifies the effort. If we are successful in finding the massive sulphides these orebodies are typically some of the highest value per tonne of any style of mineralisation. A good VMS will have gold equivalent grades (the sum of combined metal values) of around 30-60 g/t. The difference being that on a per tonne basis, typical open pit gold mineralisation at 3 g/t gold will be worth ~$75 / tonne before costs, this VMS material is typically worth 10x to 20x times that value.

The cost of the programme we completed at KZ5 was approximately $250,000 all up, compared to the $7-10m we will spend on gold exploration this year. So, the prize was worth the effort and we are pleased with the results to date.

Regards,


Chris