Hi Rico!

I have been watching the Stanley Cup so I did not see your message.

I doubt we are going to see a takeover anytime soon. For a major to take a run at grabbing Hercules it will need to have at least 5 million ounces of gold just to make the acquisition meaningful, and we are a long way from that.

Goldcorp bought out Virginia a few years ago with a small resource but I think the deal made sense because it looks like a much larger deposit area is there to be had at Eleanor. If KXL can prove up some tonnage and put more meat on the bones, then maybe we can start thing takeover.

I do not worry about the poison pill. It is nice to keep any other company from getting too opportunistic, but every company is available if the price is right.

I fully expect that KXL will do their split into separate divisions when the time is right. The uranium sector has cooled off so much that I doubt much premium would be bid into that division anyway right now, so no hurry. But this bull market is going to go on for many years and down the road I think a spinnoff is a sure bet.

My expectation is that once KXL starts posting solid results that will begin to accumulate a resource, then there will be overtures from a major. It may be just a private placement where are potential suitor puts a few milliion into the company to buy a minority ownership. It may be a JV deal that is announced on a peripheral property area. It may be an alliance to advance a bulk tonnage test mine or sink a decline ramp. But some company will step up and put some money on the line to get in the front of the line, if KXL is able to demonstrate that the reality of Hercules is in line with with the potential that we all recognize.

As long as our management can advance the project up the value curve, I doubt that any real deal is going to happen. No major is going to go hostile until we know there is a bigtime gold resource, and KXL is probably not going to vend much of the project on the cheap either. Later in the cycle, things will get interesting.

cheers!

mike