MLS Chart, page-519

Reply toAM6005

Afterreading your posts I decided to do my own research and I also spoke to the companysecretary for MLS as well as SBR and GED, Mike Muhling.

MLS, SBR, andGED each have a service agreement with Corporate Resource Services (CRS) to providethem with geological and administrative services. The effect of this is thatCRS employs the Australian geologists (Jon Dugdale, Nick Burn and StuartMcCallum), the company secretary (Michael Muhling) and the other support staff.The salary of these people is apportioned to the various companies, at costwithout any markup, on a time spent basis which is recorded on timesheets byeach employee. So if Jon Dugdale spends 25% of his time for the month on workfor MLS then 25% of his monthly salary is charged to MLS. The same applies toall staff. The staff are paid only one salary which is then apportioned asstated above.

Thecompanies believe that this system is both efficient and cost effective. Thecompanies get to share office space and use equipment owned by CRS. Also the company’s only pay for the time staff spend on the their particular projects, resulting in a very low overhead as the company’s don’t pay full time salaries for staff who may or may not be fully engaged.

As to yourcomments regarding directors, it is not unusual for a person to be a directorof more than one company. The directors fees paid are set out in the annualreports of the 3 companies. If anything the amount paid to the directors is onthe low side and much less than the fees paid by other junior explorers.