Ann: 33% Increase in Dolphin Project Underground , page-7

re: Ann: 33% Increase in Dolphin Project Unde... The KIS story becomes more and more interesting. Some aspects emerging from recent reports.

1. Former Mine Manager Alan Fudge is involved. Very positive, since Alan knows a lot about the deposit/mine.

2. The involvement with the Chinese, while not ultimately successful in completing the JV, was very important in that KIS was able to access the world-leading Chinese expertise in scheelite flotation technology. In the past, KIS treated the ore using gravity technology. Scheelite is notorious for "sliming" when crushed and ground, so that losses to tail were significant. The employment of flotation technology will allow significant increases in recoveries, but with less capex and opex. Further, flotation will enable the re-treatment of the tailings from the old operation.

3. Re-entry to the Dolphin and Bold Head underground mines will allow relatively low capex startup. The strong tungsten price will allow the cutoff grades to be significantly lower than were applied in past operations, thus increasing the reserves available for mining.

4. Exploration drilling is locating extensions to the known mineralisation.

My conclusion is that KIS is a real sleeper, with a lot of upside potential.