Hi Guys!

I think it would be a mistake for KXL to attempt any deep drilling at all in the current program. The first priority is to outline the lateral extension of the veins. They have taken the time to complete geophiz work to outline some 30km of the vein system. The shallow drilling is also the cheapest, and the quickest to accomplish.

When you start punching drill cores down below 300m depth, it becomes much more expensive to complete on a per-meter basis. That is because you have to pull the drill rods from the hole to extract the core, or if the bit breaks, the rods jam, etc. As the drill hole gets longer, you have more rods to connect and remove, and it can take more than a day just to get back down to the business end of the drill bit and carry on after any maintenance. All of that adds cost and time.

Secondly, veins do not just extend in a nice, straight line down. They will pinch and swell, and often bend or fold over on themselves at depth. The drill rods will also buckle and distort from a true line. So the odds that you will miss hitting a vein increase as you go deeper. So a drilling program will usually step down in increments of 60-100m and intercept the vein in series. As the drill core is analysed and plotted on a computer modeling system, geos can determine the geometry of the vein and predict where to hit it at the next step down.

Thirdly, to prepare a resource estimate, you can only go on an inferred basis if you have multiple pierce points by drilling, and no more than 100m between drill cores. To establish a M&I resource, you need even closer spacing, or you will not get a consulting firm to sign off on the estimates. So you might as well do all your drilling in a regular distribution so that the data you present will qualify towards a resource anyway.

Lastly, part of the reason that KXL will hold a high market cap is based on the speculation and blue-sky potential. As soon as you sink a deep core and come up empty, the stock will sell off because investors will see that the upside is limited. KXL management are good salesmen and they know how to keep a story hot. So they will continue rolling out the good news and dangling new zones as long as they can, before they start screwing around with the riskier drilling to depth.

I think before this is over, we will be hearing about drilling to depths of 1000m or more. You can run a drill for months just to complete a hole or two with that kind of target depth. The upside is worth it if we have enough data to show a vein is becoming more enriched to depth, or if there are bonanza intersections, or wider zones. But if they just want to keep the sizzle, they will be very wise to drill the hell out of the veins along strike to depths of 100m or less and build a near surface resource first.

I would think it will take them all year to complete 60,000m of drilling, even to shallow depths. They will need to have several 'qualified persons' on staff to monitor the driling and sign off on the integrity of the results. They will have more data coming in than can be digested for a long time to come, and as the labs are backed up, there will be frequent intervals when they will have to pause drilling at any one point to ensure that they are still hitting the zones they are targeting. There is going to be one hell of a lot of news flow for a long time to come, if they get 4 drills going on this property by 2008. Buckle up!

cheers!

mike