Sorry guys, this is my day of rambling. I forgot in my earlier note to discuss how Canadian politics also favours Kodiak's Hercules project, not only the uncertain international picture.

Federal Politics: Any ore coming out of the ground in Canada has to be processed in Canada. There are some exceptions but those are grandfathered long time ago. For our future gold production this does not cause any problem. However, if we eventually get into stuff like nickel and copper and we for competitive reasons would like to have the concentrates shipped abroad, nope. This means that Inco and Falco have basically monopoly on such custom concentrates and they will pay the minimum they have to pay. The reason is simple, if a competitor would like to build a new smelter and a refinery he would be 3 to 5 billion in the hole, and not competitive. This is one of the reasons I am not too keen on Kodiak being involved at Caribou Lake as well as in the ROF.

Provincial Politics: Provinces do not like to ship raw materials out of their provinces because of lost jobs and $$$. Look at Inco's Voisey Bay. Because of the New Foundland provincial government they have to build a processing plant in Argentia in spite of that they have capacity at their present smelters in Thompson, Manitoba and Sudbury, Ontario. Hercules is in Ontario and we have all the requirements here close by, we do not need to ship across provincial borders. That would be different for Caribou Lake and possibly also for the chromites found in the ROF. Chromite processing needs lots of electric power(50 to 100 MW for a decent sized plant) and Ontario is short, and this looks to get worse. By the way, Xstrata Nickel is the largest consumer of electricity in Ontario, so mining companies are noticed. One option could be to ship the chromites to Manitoba to process them there since power is cheaper and more plentiful. However, who knows about provincial politics in such case. So again, a good reason to focus at Hercules.

To conclude, politics if any thing should be in our favour.

Long and strong