David Sadowski, Raymond James says: "...as it should bolster the company's High Grade Zone resources by 10–15% (to ~2.3 Moz at 5 g/t),..".

A few comments to flush out some implications from investor's and market's perspective:

- He referred to the total high grade zone of ~2 Moz amenable for a UG operation. This includes the high grade zones (50-50 JV, from 1500SE to 2000SE, and the inferred amount from 2000SE to 2500SE) within the conceptual restrained pit as describe in PRB Technical Report and cut off of 2.5gpt. Anything ouside this, including the wedge, is included. So, his 15% increase of 2.0Moz would bring the high grade resources to 2.3 Moz Au, as stated.

- The question is where was this 15% increase in the resources coming from. If he was talking about the total resources, regardless of the ownership (50-50 JV, or 0% as in the case of the wedge), then the only place would be from the wedge. If, so his estimate could be on the low side, since from what PRB shows in the December Presentation, this area could add quite a bit more than 0.3Moz (slides 9-11, especially slide 11 showing the exceptional high grades on both sides of the wedge). As another guess, the wedge could easily add another 0.5Moz (or 25% of the current estimate of 2.0Moz. Feel free to weigh in with your opinion.

- From the market's perception (impact on the SP), the land deal should reflect the high grade deposit under the 50-50 JV. Now, PRB has 100% of it, hence the resource "gained" by PRB would be 50% of 0.850Moz = 0.425Moz (in addition to the deposit under the wedge).

- The additional resource gain from the lower grade zone should also be considered.

- A new constrained pit shell to bring in the deposits outside this shell could significantly add to the total ounces, particularly the 50-50 JV area and the wedge. Also, any high grade deposits extracted from an open pit operation would reduce the cost of the subsequent UG operation, hence the total cost of the project.

- Future potential from the 2500SE to 3000SE... and beyond into the newly acquired land is outside the scope of the above discussion. Bet that the deposit would continue into the new land portion. Dave should sink a few "wild cat" holes along this corridor. The ice is not thick enough yet for drilling on ice, so it would be potentially productive to bring a drill over to the other side of the lake, just stay a bit away from the cottages to avoid complaints (noise, etc...). There is a good 5km stretch toward the SE from the lake front for drilling. This is a good place (along with the East Limb) to roll the dice.

goldhunter