A perceptive response. Your estimate of double the Laurentian Bank Securities (LBS) estimate of $1.15 may be conservative. Bearing in mind that the LBS value was based only on known reserves at the time of their Feb 2010 report, I believe that their projection may soon become a price floor. My instinct, arising from the extensive drill results, and the volume of ore within in the drill area, could very well exceed 1m ozs (Measured and Inferred).

The directors have been shrewd in introducing a new rod mill rock crusher at the Bachelor Lake mine, in order to achieve the 1200 tpd capacity, as Barry is finding high grade resources. If, as I suspect, that Barry is as extensive as reports (potentially described as an “elephant” deposit) suggest, then, as director Ron Perry commented during a Jay Taylor interview earlier this year, the company may consider a crushing plant at Barry. When asked about share dilution, Ron Perry indicated that, if this were to be pursued, then the company may consider debt – which implies profits generated from on site crushing in order to repay capital and interest). Also, he said that the directors are shareholders and would not follow a course of financing which would be detrimental to the company’s best interests.

In my view, the directors may need to consider the following with regard to future capital requirements:-

- Process the mill with maximum output of Bachelor lake high grade ore.

- Following the NI43-101, focus on high grade areas of Barry, use the highest grade of ore from both these locations at the outset.

- Assuming that the grade could be averaged at about 7.5g per ton instead of 5-6g per ton blend from using Barry’s existing low grade pit, then the gold production at 300 days per year and 94% efficiency, would be almost 90,000 oz.

- Use the increase output from the high grade ore, in order to finance an appropriate crushing plant at Barry.

- Assuming the NI 43-101 reserves result in a share price increase to about $1.50, then additional equity finance at this share price may acceptable, but bonus warrants etc should be avoided if possible.

In summary, the directors have made excellent progress over the last few years with limited resources and I expect the NI 43-101 to mark a watershed with regard to the share price.

We may not have much longer to wait ………

Raffles (UK)