Ann: Appendix 3B, page-18

Magna pick when they convert their Con Notes into shares to capture the low share price points. Then they sell into the market. With these types of financing there is only one way the share price will go. Magna make money even if the share price falls. AVQ will need to continue drawing down on the Con Note as they need cash. Looking at the last Quarter cash flow statement AVQ spent nearly $1M on staff, admin and litigation, so the last conversion of the Con Note, which gave them around $650K will not pay their fixed costs for the next Qtr. To get anything serious done at San Jorge they are going to need a whole new financing from a bigger player and to attract that type of financing they are going to have to release the San Jorge mineral resource and some form of Feasibility Study. To do a Feasibility Study they need to infill drill San Jorge as under JORC rules you can not release financials based only on an Inferred Resource (which has not been released yet, after 18 months). Therefore, AVQ either get money for San Jorge from some non traditional source, who does not mind about the JORC Code, or they will need to raise funds to do infill drilling and then a Feasibility Study for San Jorge. It is going to be interesting to see which way they go and how they raise the funding as with their current funding they do not have the cash to develop San Jorge.