This is another part of the puzzle and if everything goes as planned and price of gold stays or increases more these guys are very cheap:

Overall, for the second quarter, the expected tonnage was mined and milled but at a lower than expected grade and recovery through the Aurbel Mill. The resulting total cash cost and net profit for Q2 was a direct result of three inter-related factors:

a) Lower than expected gold grades: A lower than expected grade of gold was extracted at Lac Herbin because of extensive dilution from ground failures in two areas that were already in the mining sequence. Extra development, added to better control the stability of the stopes and reduce dilution to planned levels, delayed production from the higher grade areas. This new development began in Q2 and is expected to be completed in Q3 when resulting higher grades are expected to be mined. As well, new areas of mining where additional definition drilling was required and completed in Q2, were entering their production cycle late in Q2 with mining now advancing through the areas.

b) Milling recovery rates were lower than expected: The Aurbel Mill was re-started with the intent of reducing milling costs for 2010 and beyond. The initial tuning process resulted in inconsistent recovery rates for longer than expected. The throughput in the mill was lowered, and taken from low grade stockpiles, to gain control on mill recoveries resulting in higher costs of milling in the second quarter. The mill was unable to catch up on the stockpiled ore during the second quarter and more expensive custom milling campaign was added to the quarter.

c) Higher mining expenses were incurred, compared to Q1-2010 and Q2-2009, due to the above situations. Through the second quarter, corrective steps to address each issue were implemented. The additional development required to decrease the vertical spacing of sub-levels in stopes is nearly

complete, the mill is now operating as designed and the grades in the new mining areas are more predictable with the additional completed definition drilling. While the impact has been negative for Q2, the Company believes Q3 is beginning to turn around, with the last quarter of 2010 expected to be on plan regarding gold production and cost per ounce.