LIQUIDITY AND CAPITAL RESOURCES
At the end of June 30, 2009, the Company had $222,000 in general funds on hand compared to $833,000 at the end of June, 2008. The Company had restricted cash on hand at March 31, 2009 in the amount of $431,000 compared to $463,000 on June 30, 2008.

Cash flows resulted in no increase or decrease in general funds during the second quarter of 2009, compared to a net decrease of $789,000 for the comparable period in 2008. The Company’s exploration programs in the second quarter of 2009 resulted in net costs of $19,000 (2008 - $320,000) after recoveries of $59,000 (2008 - $50,000). During the second quarter of 2009, the Company raised $568,000 in net funding from issuance of shares ($1,235,000 in the second quarter of 2008).

The Company has reviewed its cash flow projections for 2009 and believes that it will have sufficient funds to finance its operations throughout the year. This will be accomplished through financing and property activities, supplemented where appropriate with reductions in operating expenses.