Dave Webb on Why a Feasibility Study Is Needed.

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=TDC&t=LIST&m=28767977&l=0&pd=1&r=0

Dear Dr Webb,

Can you please explain your comments on the news article published late last year.

With your permission, your comments will be published in the Stock House forum.

Attached Link to the article.

http://www.nnsl.com/business/pdfs/mining/pgsb12-13.pdf

"We expect the pre-feasibility study in the first half of 2010," said Webb. "Now,it doesn't necessarily follow that we go to a full feasibility study. If the economics are so outrageously good, then you can start moving toward development and production right away."

Please explain the quote you made and how relevant your comments are now after the pre feasibility has occurred and results are now on hand. Are the economics still outrageously good

Thank you.
GF

fromDave Webb <webb@tyhee.com>
togoldfvr5@gmail.com

dateThu, Oct 28, 2010 at 8:55 AM
subjectRE: Attn: Dave Webb (Yellow Knife Gold Project)

hide details 8:55 AM (1 hour ago)

GF
We received a PFS during the first half of 2010 and released those results within several weeks after third party reviews (as amended). The results were positive, demonstrating economic viability under reasonably conservative assumptions. It is shows exceptional profitability under current economic conditions.
The PFS also identified areas where the economics can be improved, in some instances substantially. This includes reductions in operation costs via further geotechnical and engineering studies, better definition of open pittable reserves and resources (Clan Lake resources end where the drilling ends, and therefore the pit model assumes waste where there is no drilling. Drilling this fall confirmed that the strike extension of Clan Lake is mineralized, therefore the Clan Lake pit model can be reworked to incorporate this gold). We also excluded all underground resources at Clan lake, and these can be brought into an engineering study.
Mining operations are typically financed with a combination of debt and equity. The preference is to minimize equity issuances by maximizing debt. Going into meetings with bankers to discuss project borrowing, you want to have an engineering study that “blows them out of the water.” It should be bullet proof, show tremendous profitability under absurdly conservative assumptions and be relatively insensitive to any negatives under normal “what if” scenarios. If you think you can improve this engineering study cheaply, then you do it. If it costs a few million dollars to improve the amount and terms on a $100 million loan, then do it.
This is where Tyhee is today. It is relatively cheap and easy to improve our projects economics. We can accomplish a lot in a short period of time, that may save the company tens of millions of dollars down the road. It is a good investment.
You may paraphrase what I have said.
Dave
From: Gold Fever <goldfvr5@gmail.com>
Date: Oct 27, 2010
Subject: Attn: Dave Webb (Yellow Knife Gold Project)
To: info@tyhee.com