Dave replied very quickly to my question about where the drills will be turning, and future strategy; and his response is very encouraging.

In the short term, he says they will firm up more ounces to prove the economics of the project, largely from the Clan Lake deposit. Then finance the mine - not with equity - but with bank loans. I like this. I give a paraphrased report below from him:

Bob

The previously announced 5 gold zones at Clan Lake, going from east to west are Cub East, Cub, Iceberg, Morel, Main, and 330 Zones. The Cub Zone is the one with the plus 100 gpt gold assays, from a most unusual geological setting. The deposit requires some careful work to figure it out. The Main Zone has the reported gold resource and gold reserve and has been the focus of our drilling. There are results from this area to be reported shortly. The 330 Zone had been the subject of drilling in the past and hosts a small historic resource we never reported because it is small and no longer reportable under NI 43-101.

Our crews have been busy and the next news release (no date noted) will disclose what has happened.

The work has been going as expected and the results have been favourable. Ounces are being added.

The market never reacts the way one expects it to for many reasons, and it is usually the unexpected reasons that make the most difference. We make announcements that are read by technical, non-technical, financial, and non-financial people. Non-technical readers do not see the difference between an inferred ounce and a proven ounce. Non-financial people focus on the total resource. Financial people focus on the reserves. In putting out news releases the general market (non-technical, moderately financially savvy) reacts very different to the technical and financially savvy market. We’ve been catering to the financially savvy market, because this is where real, lasting value is developed. True, this group does not run out and buy 50 to 100,000 shares. They take weeks and buy 50 to 100 million shares.

The PFS showed that at 811,000 ounces we can recover all of our capital and make a decent return. Much of the 811,000 ounces would be used to pay off the capital costs. Once that is done each subsequent ounce would go straight to the bottom line (less operating costs). At $541 operating costs you can imagine that an additional 100,000 ounces would add $40 to $50 million to the NPV of the project. Our job is to take many more ounces into the FS so when we have a bankable document, the banks will be lining up. We do after all want to use their money at a few percent interest rather than use our equity.

Dave