The Company continued to confirm the high grade nature of the newly discovered Hinge deposits based on very successful exploration drilling program from the surface. Drilling on the Hinge deposits will continue from surface in the first quarter of 2009 and a concurrent underground diamond drilling program will commence in the second quarter of 2009 to support mining activities. The company expects to have an initial NI 43-101 resource estimate for the new discovery in the second quarter of 2009. Delays in preparing the document have been experienced mostly due to the rapidly changing discovery profile surrounding the Hinge. During the fourth quarter of 2008 the Company continued advancing the new exploration ramp towards the high potential target zone approximately 350 feet (107 meters) below surface. To-date the company has advanced over 2,300 feet (701 meters) and has intersected the new zone in the first quarter of 2009 and is in the process of extracting a bulk sample as this report is finalized. During the quarter underground exploration programs at the Rice Lake mine included 30 level (approximately 150 ft per level, so 4,500 feet or 1,372 meters below surface) in upper D-shaft within the main Rice Lake ore bodies, open and undeveloped areas between the main Rice Lake ore bodies and the Deep East zones below 4980 ( after 32 level, the nomenclature of the mine changes and describes depth as 10,000 feet less the stated level so 4980 level is approximately 5100 ft or 1,554 meters below surface) level, and drilling on the downward extensions of the main Rice Lake ore bodies below 4605 level (approximately 5,395 ft. or 1,644 meters below surface). A new underground drilling contractor will begin work in the second quarter of 2009.

During the fourth quarter the Company transitioned to a 100% employee based underground workforce. The Company’s primary mining contractor ("Dumas Mining") was demobilized during the quarter. The Company has been very successful in attracting and retaining experienced miners and technical staff and is well positioned to ramp up production in the second quarter of 2009. The Company will continue to utilize contractors on an as required basis to supplement the current workforce and in the performance of non-core work.