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San Gold also reports that development has commenced toward the “007” zone from the Hinge decline. Mobilization

of the mining contractor Cementation took place during the first week in January and advance of approximately

20 feet per day is now underway with contract crews. This initial access drift is approximately 550

meters (1800 ft) long and is expected to reach the “007” zone late in the second quarter........eventually San will have a maze of drifts with scope trams delivering buckets of gold back to the crusher. I see time lines in the future being met and our Mill upgrades allowing for this expected high tonnage........To-day, we hear this Mill expansion will start next yr so i am thinking Dale wants to meet his 60,000 oz this yr with out interuptions..Looking ahead alot of planing will have to take place for this Mill. I have not seen this Mill so i am just babling here as this Mill was upgraded in 2001 by the former owners. Provinces in Canada have different regulations so Manitoba could be more lax.We don:t know what Sans design capacity is but we know it is Permited for 1250 tns/day. San is talking of atleast a 30 to 40 % expansion here so like i say what capacity of vessels and tanks hold is a guess. I see wheir Permiting could be an issue with the water and Tailings. Read this process and think of increasing the capacity by 30 %. Traps7