Hi Guys!

Just to respond to a number of questions that have appeared on the forum today:

The lowest minable grade for an underground mine would probably be in the range of 4 g/t. I have seen some people suggesting that 2 g/t would do it, but I most of the reputable companies I know of that have similar deposits are using a cutoff of 4 g/t, which means they believe anything below that is not economic and will not count in the resource. To put that in perspective, at the current metals price, 4 g/t is about $120 rock in gross metal value. Even assuming high recovery efficiency, at the end of the day you get about $100 in revenues per tonne at the highest end of the range. Now in a variable vein geometry with relatively narrow average widths, a lot of the rock extracted along with the ore is going to be waste rock. And that extra dilution has the effect of lowering the average grade of the material that is processed in the recovery circuit. Most mining engineers will allow for a minimum of 25% dilution. So now you are down to about $75 per tonne in net pay for the ore. Mining costs have been subject to inflation just like everything else. Training, safety equipment, insurance, salaries, etc. have all be going up, along with cost for cement, energy, equipment, spare parts, rock bolting and netting, etc. I doubt any mid-size mine in Canada can operate below $75 per tonne mining costs. So all in, I would say that 4 g/t is the absolute minimum for an underground mine, even if gold goes beyond $1000.

As for the anomaly, I think KXL is going to drill every target and test every geophysical anomaly before its all done, but for now they are content to just advance methodically and step out from the current discovery zone, which is exactly how a responsible exploration company should operate. I think the WL zone was the first big discovery and it was a fluke, since it was the closest outcrop to the main road and therefore was drilled off first. There will probably be lots of other areas on this property that will yield higher intervals but all in good time.

In regards to the drilling, the first relatively shallow drill program was set up to get data in order to fix the angle and dip of the veins. They drilled off on either side of the vein, and plot the intercepts to arrive at a 3D model of the vein structure. Thereafter they just step the drill pads out further from the vein to intercept it at a right angle further to depth.

Should be loads of fun still ahead for this story and I am very happy I could add more shares cheaply. Perhaps I should have been more patient intraday, but I have been waiting for weeks to get a chance to buy more and may hit the offer one more time tomorrow.

cheers!

mike