Before the end of this month, Tyhee should be drilling full speed at Clan Lake. You could wonder why Tyhee is not continuing the drilling at Ormsby and/or Nicholas Lake. After all this is where they want to build the plant and extract gold. The PFS and the permitting process are based on these properties with no consideration for Clan Lake or any other property for this matter.
So why using cash from the last financing exclusively (except the 2 drills that have been used at Ormsby for permitting and "as well as two combined exploration/engineering drillholes: (PR dated 04/02)? The answer is a very simple one: To increase resources at the lowest cost possible and to reach the next big threshold: 3 millions ounces as soon as possible.

The grade for Clan Lake is higher than Ormsby and Nicholas Lake: 3.64g/oz compared to 3.42 and 3.32 respectively. The difference in grade is important for at least 2 reasons:
1- The higher the grade the higher the resources' increase. (while spending the same amount of cash for exploration)
2- Higher grade will make the production cost/oz lower. You have to remember that Clan Lake is far away from the location of the plant (Clan Lake Main Zone is about 33 kms away from the planned mill site at Ormsby - compared to 10 kms for Nicholas Lake). The cost for transporting the ore from Clan Lake to the mill is a lot higher than the one from Ormsby and Nicholas Lake. I would estimate THE ADDED COST FOR HAULING AT $3.3 to $5. This is still an acceptable added cost that is still below the value of the higher grade (estimated at about $7/t)
However - and this is why increasing the resources at Clan Lake is very important- the cost of building the roads between Clan Lake and the mill plant (200 to 250K/km) is between 7 and 10 millions dollars. If we use the indicated resources for Clan Lake -354 000oz- and divide the capital cost for building the road we get a cost of $28-29/oz. If Tyhee can double the indicated resources at Clan Lake the capital cost is only $14-14.5/oz.

IF the actual resources at Clan Lake -354000oz- can be converted to resources and WITHOUT adding the on-going drilling, this will add 2 years to the mine life. A doubling of resources will add 4 years !!!

This is why Clan Lake exploration is so important. REMEMBER:
Higher resources = Easier financing.
Longer mine life = higher profits.

Now we just have to wait for the first drill report by the end of February.
Hubert