I have not spoken with IR for a while, but I would be very surprised if we get anything more than an inferred resource reported. The reason is because where most of the drilling has been completed so far the results have tended towards intensely variable gold grades across inconsistent vein widths. This sort of thing is complicated by the nugget effect of the veins. A drill core is about two inches thick, and whether it hits a high grade wide section of a vein, or else perhaps two meters along it may encounter a narrow low grade interval, is entirely a matter of chance.

The process to establish a compliant resource is going to be conservative, and discount the higher grade intervals. And because of that intense variability, the consultants will probably not sign off on any estimates that are more than 60m from pierce points in the vein established by drilling. So where you have less drill density, those parts of the deposit will be excluded from the resource, even though it is likely that more gold exists. That is just the nature of the process folks, and it has been the case for many other juniors with similar geology to what KXL is exploring around Geraldton. So, my personal opinion is that 500,000 ounces is wishfull thinking, and we will not even come close to that.

In fact, I think it is a waste of time to go through all the time and expense to present a resource estimate when the deposit has such a limited economic significance at this point. Perhaps I am very much underestimating the total body of data at this point, and the fact that KXL is indeed presenting a report is an indication there is much more gold there than I have imagined from my own review. JMHO, and that is in part based on the disappointment I have gone through many times in the past as resource estimates have been released that are so conservative that they almost do a disservice to the companies that work to present them.

As for the IMF, I do not consider this group to be actively interested in achieving the highest price for their gold. It would be very stupid on their part to dangle the threat of gold sales at least a dozen times in the last few years, and each time see the price of gold sell off in reaction, if in fact they truly wished to maximize their sale price. I suspect their disclosure is more of a propaganda effort to bail out CBs that are trapped on the wrong side of forward sales and swaps. And therefore I do not respect their documented opinion that China will not be a logical buyer of that gold. China is the most appropriate candidate to take that gold down, and could do so with the spare cash that is a rounding error for their total for-ex holdings. And China is smart enough not to show their hand before they make a move, so I think they are quite happy to let the world believe they are not interested for now.

The bottom line is that gold rose in value for many years in the last decade even with European banks dumping 500 tons per year in the market. This 192 tons of gold the IMF wants to sell is a drop in the bucket and should not even account for a hiccup in the daily spot trading. There is nothing transparent about the gold market, and nothing is as it appears. Remember just that there is the way things should be, and then there is the way things are. The two are rarely in agreement.

A final note on KXL. I think the stock has hit its bottom and the days of cheap shares are coming to an end. That does not mean the stock is going to recover to new highs, but it does mean it should now rise in tandem with the recovery of the market, and with new highs on the way for gold. That alone is why I continue to hold, plus the rational expectation that sooner or later they will find a big pot of gold in one of their target zones and it will be game on for real.

cheers!

mike