Recovery Question on .4%

This was a question I put forward to anyone on the ISM S. H. site. Only one person has given an effort at answering and I would think some investors of this site may be interested in what was said.

“Do anyone of you believe that after waiting for almost two years to see the Micon report, ISM and Micon didn’t even bother to test the major part of the low grade Mineralization reported, you know all that .4% and lower grade”.

In looking at the recovery comments in the report, I find it somewhat confusing. Section 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING describes samples of six composites; four by grade level, two by zone. Following these samples through, the zone composites were blended to provide a seventh composite. There is a comment that the highest grade composite “0.5->1.0 Comp” was removed from (some) testing "due to limited sample availability". Various procedures are described, as applied to some or all of the samples, but all but the zone sample called the Nickel Zone sample, seem to be absent in the final commentary. The Nickel Zone sample is indicated in Table 16.2 as being a .88% assay grade, and the achievable recovery noted for this sample is 75-77%.

All comments indicate that testing is incomplete, with excerpts such as "

The following tests are planned to finalise this phase of testing:

? Optimise cleaner circuit conditions (2-3 tests).

? Subject the remaining composites to the proposed flowsheet (6 tests).

? Submit tailings from each composite for preliminary environmental characterisation.

and

Tests on the other composites have to be completed to confirm that the recovery remains high for the lower grade composites.

It seems to me that the report is very preliminary in many areas. My understanding is that there certainly can be recovery and processing problems with lower grades, and Micon indicate tests on the lower grade composites is required to confirm recoverability. The composite chosen for testing was the highest available, those untested are of considerably lower grade, as the average grade is estimated at .41%, the average grade of untested composites must be under .41%average, some as low as .24%.

In summary it does seem that the testing is incomplete on the low grade mineralization. I have no idea why this would be the case, as the samples were taken in July 2008, and the test program was completed in April 2009. I noticed no where in the report, a reason why all testing was not completed by SGS Lakefield, nor why in this amount of time available it is found that testing must be completed on five of the six samples.

I find it even more astounding that ISM has at this point set out plans for $4.5 million in exploration which Micon agrees is appropriate. What on earth were they thinking during 2009 when drilling had virtually ceased, or in 2008 when it could have been done and reduced the flow through penalty?

Maybe management should be given the benefit of the doubt, but it looks to me like there are a number of questions to be answered. Almost two years to get this NI 43-101 report, and there's more in the report about what hasn't been done, than there is about what's been done.