Additional Notes From The Shareholder’s Meeting:

I’ll try to cover some of the items that have not been previously discussed or where there might be a discrepancy from what I heard versus what has already been reported by other shareholder’s. It was very noisy during the meeting because the tent was right next to the mill which was going full tilt the whole time. The presenter’s (PQ, RS, and RK) had microphones which were easier to hear, but it was almost impossible to hear what questions were being asked. What I have compiled below is either from RS or PQ, as RK only did the introductions for the most part.

Geologists: They have hired two new Geologists’, Rick Walker and Kyle Durrett and a Mine Engineer, Rich Appling. They will hire an additional Geologist in November. They believe they should receive the MSHA permits soon because not having the Geologist’s or the Mine Engineer was the hang-up and they have now met all of MSHA’s requirements.

Assay Results: Assay results have been all over the place so they are using an average of 2.94 grams per ton gold and 15.02 grams per ton silver. It should be noted the process they use only recovers about 35% of the silver. They already have stockpiled 10-12,000 tons of tailings and want 20,000 tons at the Mill before they shut down that operation for the winter.

Mill Expansion: The Mill building will be expanded an additional 40 feet starting today and should be ready for occupancy within 45 days. They are in the process of purchasing additional equipment to expand the Mill’s thru put and anticipate being online by early spring. Construction of the Lab, Smelter, and Vault complex was well underway and should be completed within the next 30-40 days. The new smelter is much larger than what they are using now and can pore a much larger Dore bar.

Canadian National Instrument-NI 43-101: They indicated they are presently looking to purchase 2 drilling rigs to start the 43-101 process. The first part of the process, as I understand it, is mostly historical documentation which they expect to publish by January. Once they receive MSHA’s blessing, they’ll be allowed to prepare the Sinker Tunnel to begin drilling. They’ve already done a lot of work in the Sinker including a ventilation system and a buried 1 foot diameter corrugated steel drainage system that extends the length of the tunnel. Long 20 foot lengths of 4 inch diameter heavy gauge (1/4 inch thick) steel pneumatic pipes were being installed along the ceiling to provide pneumatic pressure for the drills they are using to prepare the tunnel to meet MSHA’s requirements. They need to carve out a larger room in the Sinker where they intend to drill. They need extra room because the drill samples are taken in many directions and the drills need the room to operate efficiently. Drilling in the Sinker will be done in an upward direction where the vein structures are located. Another benefit to drilling in the Sinker is they only need to drill 500-1000 feet at most to get the results they are looking for. The projected timeline they hope to attain is roughly Sinker ready for drilling by the end of January, drilling and initial results available by early spring. Hopefully we will know a lot more in about 6 months. As far as having a completed 43-101, I don’t know how much drilling needs to be accomplished before it can be filed. As I understand it, the 43-101 is more of a living document which is constantly updated as new drill results come in. They will start the core sampling process on the top of the mountain next summer when the snow melts. They have already identified where they want to drill on top. Additionally, they have filed claims for around 1000 acres on the top of the mountain. Essentially, with the exception of any existing claims, they have the mining rights to the whole top of the mountain.

Sinker Tunnel: They intend to connect the Sinker Tunnel with the Golden Chariot once the water is drained from it (no known timeline yet). It will be used as the emergency exit and for additional ventilation. Estimated cost to connect is 100-150K.

Burn Rate: The burn rate for the Mill is approximately $4000/day, $120,000/month and Corporate is $1000/day, $30,000/month or total of $5000/day, $150,000/month. No figures were given for capital expenditures, but as you can imagine, it’s not cheap to do all the things that are getting done. ( Using the approximately 3 grams/ton of gold and 40 to 50 tons of thru put per day yields around 3-4 oz. of gold per day coming out of the mill. This means the Mill is operating at or slightly above breakeven. Once the output is increased, we should become more and more cash flow positive depending on yields and output. This is my own personal deduction.)

Funding: The Centurion LOC was being refiled with the SEC and should be resolved soon. They have been using private placement money in the interim and have interested parties for the future.

Summary: All in all, a very well presented and professional presentation by everyone involved. I know some here want things to go faster but when you’re dealing with governmental agencies a lot, nothing goes fast. Hopefully, some of the shareholders that were there can post some additional pictures showing the tremendous amount of work that’s already been accomplished. I look forward to attending next year’s SHM.

Semper Fi,

Bluesideup