I spoke with Peter Smith yesterday afternoon. As usual, I found him to be easy to talk to, and quite willing to speak (in a linear manner) in detail about what FNC is doing.

The delay in the start of the drilling program has to do with delays in getting all the gravity and pulse EM geophysics done at 50m spacings on the east-west grid (they are working together with NOT on this). However, he is happy with the way things are going and said everything is progressing according to plan. He is still planning to be drilling before the spring break-up.

He did report that NOT drilled holes at the end of February very near FNC ground. What is puzzling is that Smith reports that although Nemis said to Smith that the holes failed to hit the source of the EM pulse anomaly theyr were targeting, Nemis, according to Smith, still described them as "barn burners". It seems that Smith does not know excatly what Nemis means by this, and given they are not working together in a joint venture arrangement, Smith is not entitled to know. Take from it what you will...

At any rate, Smiths believes the the known structures are part of a larger system in the DE1 area, and he seems quite confident in FNC's prospects.

Interestingly, I also spoke with David Palmer of PRB this morning, and he feels Smith's opinion is a sound assessment based on what they are learning about the DE1 area. PRB's new NR is, despite the drilling delay, good news. The discovery of the ourcrop is significant, and will help them with structure interpretation, It will be mapped once the break-up occurs aroound 2nd -3rd week of May. He also expects to be drilling as soon as the break-up is done using the same drill that used for 90% of their previous drilling up there. Although he would prefer to be drilling right now, he sees the delay as an opportunity to generate and refine targets and devlop a larger drill program.

Right now, I think the most prospective ground in Mc Fauld's Lake is in the NOT - FNC - PRB neighbourhood.

Regards,

B.