I was unable to attend the AGM and presentation in Vancouver and have not met or spoken with anyone connected with SLI, therefore the following is only my conjecture based on what I have read. Thanks to all that posted their AGM experience.

In Paul Gray’s September 30, 2010 report on page 38 he outlined his exploration recommendations in five phases.

1 Phase IA: Audio Magnetotelluric Three Dimensional Inversion of the Quantec Geophysical Data

2. Phase IB: Systematic and Detailed Tesoro Camp Wide Mapping and Sampling Program

3. Phase IC: Systematic Mechanical Trenching Program: A detailed trenching program focused on those areas identified as anomalous from Phase 1A and involving a D-6 or larger excavator should be implemented on the Tesoro Property as soon as practicable. This program should be concentrated on those areas on strike and in between known mineralized vein and in particular be located in the North Corridor and on the high priority near surface targets identified by Quantec. A program budget of $180,000 and duration of five (5) weeks would be required for this phase, which could be done any time, weather permitting.

The trenching commenced on May 17, 2011.

None of the trenching has been sent to the Lima assay office for testing as of per the comments of shareholders that attended the AGM. Theoretically the collecting of samples could have been completed by the end of June as per Paul Gray’s report.

In John Brophy’s March 8th 2005 report page 47 he made special mention of the available workforce.

Within the Nazca-Ocoña Gold Belt, there are thousands of men who augment meager agricultural-pastoral incomes by “mining” narrow gold-bearing quartz veins; a skill that has been passed down from generation to generation for centuries. These men are known as “informales” because they are informal miners with no title to the properties they are exploiting.

The informales may not be well educated, but they know how to evaluate narrow veins. They have perfected the art of “piruña”, which involves estimating gold grade by pulverizing a fist-sized sample of quartz and examining the “colours” left behind after panning in a small conical dish. As the author has personally verified several times, piruña estimates of gold grade are very reliable for samples grading ≥ ½ ounce. Unfortunately this assay technique, however accurate, cannot be reported to be reliable in this instrument.

I suspect that these informales along with the geologist could have gained considerable knowledge from examining the trenching prior to bagging and have anticipated the results of the assays. If the results are extremely favourable making open pit mining very profitable while removing the overburden to get at the ovoid, it could have struck fear in the hearts of SLI management. Realizing that if these results were to be made public prior to drilling the ovoid, there might be some major willing to make (what could be viewed as) a nice bid for SLI, thereby putting the SLI board on the defensive trying to stall until the ovoid’s contents could be proven, which could be several months or more, especially if a deep drill is unavailable.

Lori said that it was necessary to close the Oct. 7, 2011 PP ($4.5M) and institute an extended blackout prior to sending trenching and drill samples for assay, to ensure that we do not have any problems with the securities regulators. Based on the comments from the AGM it seems that Lori is making special efforts to prevent any possibility of perceived wrongdoing by anyone. She also mentioned building up the treasury to thwart any low ball hostile offers for SLI by having available funds to quickly sink some deep holes. I believe having deep pockets to fight off a hostile attack is a very valid reason, along with getting a bigger share of the prize for friends and herself, with which I personally have no problem.

The point is these were not major concerns back in April prior to commencing the trenching and drilling, as it certainly would have been more logical to time the PP differently. I believe there is more certainty about the prize, hence the greater height of awareness.

4. Phase ID: Geological and Geophysical Compilation Program: After completion of Phases 1A-1C, a geologist should be employed to compile the geological and geophysical data into a single coherent GIS package with clear diamond drilling targets selected. This step is required to determine the most geologically and geo-physically suited targets to test by diamond drilling. Targets should be generated and prioritized into a logical progression of drilling order, whereby early drill holes focus on both near surface and deeper seated geophysical targets with interpreted geological controls. This important aspect of the program will require two (2) weeks and a budget of $10,800.00 and can be completed any time after Phase 1C is completed and assays received.

This phase was obviously completed without receiving the assays from the Lima assay office.

5. Phase IE: Diamond Drill Program: A suite of at least 24 drill holes (totalling at least 10,000 metres) designed to test the near surface and deeper seated geophysical anomalies identified and substantiated from Phases 1A-1D are warranted for the Tesoro Project. Eleven weeks would be required to mobilize and drill the targets identified within Phase ID. A program budget of $2,200,000 would be necessary for this phase and would best be conducted between May and December.

This phase began August 17th.

“The initial series of drill holes will test the "Zona Central IP Anomaly" in the A4, A5, A7 and A8 vein areas of Zona Central. The drill holes will test high-priority drill targets identified by Titan 24 geophysical surveys and the down-dip extensions of known gold mineralization.”

It is still somewhat unclear as to what holes are being drilled.

There was talk of 26 primary and 26 secondary targets for a total of 52 holes of which 3 were to be deep holes 1,500m/each. This leaves 5,500m/49 holes, averaging 112m per hole, I thought the >18.5 milliradians anomaly referred to as the ovoid is 600m below the surface and extends to about 1000m, while the larger >16 milliradians envelope is somewhat closer to the surface and extends down to at least 1500m.

At the AGM meeting it was reported that Lori said that although the deep drill was not on site yet, it didn’t mean that we would not have drill results that would test the ovoid. Apparently we are close to 50% complete the first phase (shallow drilling) and 5-6 hole cores have been sent for assay.

If 5,500m*50%complete/5 holes = an average 550m/hole, this could very well test the anomaly as Lori has stated but would mean fewer than 52 holes in total.

Can the shallow Energold rig drill to 600m?

If I was one of the majors watching this closely I’m not sure I would want the deep holes drilled prior to making a bid. Which makes me wonder just how much clout they have with the drilling companies?

Anyways, what I’m trying to say and probably not very well, is that the way this story has unfolded makes me more certain of the significance of this discovery.

I also think it is very relevant that the point regarding 30% of the shares being held by management, family and close friends was mentioned at this time.

Hopefully, that along with the high retail holdings of informed investors and united SLI board members should make a hostile takeover very difficult.

BubaBub.