I attended the San Francisco Hard Assets Conference specifically to hear our President/COO Brian Maher give a shareholder update for KXL. In the past the weather had been cloudy and cold at the time of this conference Today it was sunny. Maybe that explains the light turnout. If I'd just assumed the KXL Update was always where it had been I'd have missed it as well. It was in a room at the end of the hall. To get to it you had to clear a guard (who knew about the KXL meeting). The guard was only allowing in folks for an invitation only lunch otherwise.

I got there early, one woman came by, didn't know about KXL. I tried to explain. She begged off, saying she was trying find Pamela Aden's session.

There were five people there when it started. Some others may have come in, but I never saw them.

The cool thing is that the folks from Alto were there early as well. I got to listen to Brian talking shop with them. In that situation, he can be more frank as he is talking with fellow professionals in the business, in the same gold camp. Let drop in those exchanges was that Brian had just come off three weeks of road shows. Some investors in the prior private placement seemed to understand what we had and were positive about possible future placements. Remember, I am just paraphrasing this all from memory.

Brian thought the resource estimate will likely justify a scoping study. A scoping study with a ramp of 1400 meters would be about $5 million. The ramp would be easy to sink in the rock, could progress quickly.

The Alto person spoke positively of the Ontex deposit.

On to the presentation.

Brian was recorded on video speaking from the November 10 presentation posted on the website.

Slide 3. The corporate philosophy. They're looking to the future. High grade, high quality Canada centric projects are their target. Read the slide, each of those three statements he expressed as fundamental for the company.

Slide 4. This is key. Brian called it a three point plan. First and foremost is to establish the economic viability of the Hercules Project. The resource estimate is the basis for the scoping study. The execution of the scoping study will set the stage for a revaluation of the Hercules Project in the market from exploration assets to development assets. Second, is the generative exploration. Third, acquisitions - more about that later.

Slide 5. Adequate money for 2010 and beyond with the same or more exploration activity. (In jawing with Alto Brian said they might do even 20-30% more than this year.)

Slide 6. Board Chairman Phelps introduced the company to Mr. Barber - experienced in investment banking in the Natural Resource sector with Deutsche Bank. Mr. Barber liked what he saw and became our newest board member.

Slide 7. The new CFO gives Brian a right hand man who understands how to recognize and develop new opportunities.

Slide 8. (I think this is right - have to wait for the video to be sure.) Of the greenstone gold camps in Ontario, Geraldton-Beardmore has the highest average grade. Look at the chart in the lower left corner. KXL hopes to push that 4 million ounce number to 10-12 million ounces and beyond.

Slide 9. Brian is emphatic about the objectives (as management should be). Drilling was completed 4-5 days ago. They will produce the resource estimate. The resource estimate is a snapshot. It will be expanded with subsequent exploration and the scoping study. The land position is 120 km east to west and 30 km wide. The infrastructure is there with the Trans-Canada Highway, the railway, the mining friendly jurisdiction, and a skilled workforce.

Slide 10. A major zone of parallel stacked veins. This is a low arsenic system which will make the permitting process easier. The 43-101 Technical Assessment makes it easier to put out the Resource Estimate in rapid fashion.

Slide 12-13. The Golden Mile is an example of old fashioned exploration. Stephen Roach found surface outcropping and proceeded to follow it on the surface, Bobby Ore vein is an example of the opposite. High in the zone of the drilling results was a narrow band, 20-30cm in width, of gold mineralization. The geologist put the data in Gencom, modeled it, then brought in the backhoe. It went from model-to-surface, the opposite of the Golden Mile. An example of how new exploration comes about.

Slide 14. At the Golden Mile we are fortunate to have concentrations of gold (above 20 grams per meter ) at the depth of 200-300 meters. Mining this high grade at this relaltively shallow depth brings a more rapid return of capital - we would become cash flow positive more quickly. Anticipating a 1400 meter ramp. Our mineralization is clean. Timmins had over 20 deposits, not big individually, but in aggregate very big. The question is, is B-G merely a 10 million ounce camp or is it significantly more?

Slide 16. New Exploration label is where Bobby Ore vein is located.

Slide 18. West Geraldton could be heading to resource delineation. 2008 was the first year. OK results. This year the trenches were remapped. Stephen Roach thought the angle of the deposit was shallower than the 70 degrees of the Golden Mile. The reinterpretation made a great differnece.

Slide 19. West Geraldton. Strong results from hole right on the shear.. The shear is very clear. 4k of strike length.

Slide 20-21. Brenbar extesnsional fracture. The new geologist Quentin Browne, identified VMS mineralization in the northern part of Brenbar. In the booth were a couple of specimens from channel samples. They've found 200-300 grams of silver with a couple of grams of gold. In the other large amounts of copper also. This is a repeated pattern in the gold camps, VMS deposits being mined right next to deep high grade vein mines.

Slide 23-24. Mines Point was acquired for essentially the cost of staking. It is nicely folded. At the booth Quentin showed me the tight angles where mineralization could have been deposited. A great story that has the potential to be a huge find.

Slide 25-26. West Millennium. All five drill holes hit significant alteration and U308. Had one of the best drill holes in the whole Basin. Great structural setting. Consolidated land package based on findings. Will spend $2 million this winter drilling.

Slide 27. Restates corporate philosophy and strongly emphasizes the objectives for 2009-2010. Brian said you can check them off as they happen. Drilling on GM was just completed. The resource estimate will be produced. Larry Hillesland, the Hercules Project Manager will be working the resource estimate with the consultants. Brian believes the resource estimate will justify a scoping study.

Questions.
Are we looking at mines, development assets or exploration projects for acquisition.
Brian is working hard at finding the right aquisitiion. Looking for ounces in the ground - development assets. (Me -- the comments Brian made earlier about the new board member and CFO ring loudly here - they are pushing forward on this front.)

What happened with the Golden Gate?
Stripped it was impressive showing. The geochem didn't justify any more exploration.

What about the Sleeping Giant?
Couple of companies have looked at it. Brian believes a JV is the best path for it.

My impression.
I think that they are operating like a precision machine. The program has been to define the Golden Mile in a resource estimate to set the stage for the scoping study. Brian said there is nothing like having the ramp as your exploration platform. Instead of interpreting small diameter cores at wide spacings, you can actually look at the vein. Drilling becomes cheaper (my comment). We are going to morph from a greenfield explorer to a mine development company with ounces in the ground. We'll be building ounces in the ground. We'll be aquiring ounces in the ground. And we'll still be generating exploration targets and exploring them.

Brian noted the change in style of the company. I said it was the first time the booth didn't have 3-D models a movie nor booth-babes. Brian wants to emulate companies Virginia, Premier and others. Just put out the facts - let the numbers speak for you.

Makes me want to continue accumulating.