Ann: Response to ASX Query, page-28

"There appears no doubt IMO that the assay results are not false positives"

I haven't suggest that the results are false positives. The only way for a false positive to occur is by contamination in the laboratory or the introduction of additional gold, Pt, Pd and Ag into the metallurgical process (to help liberate the target metals) that is later not properly accounted for in the final analysis or by persons acting in improper ways. So far one needs to believe, like you do, that none of the above has occurred.

" and that there is therefore a sizeable gold resource widely disseminated on the tenements"

It hasn't been proven that any of the metals are widely disseminated as the collection of wide spaced surface samples into composite samples for testing doesn't exclude the possibility that all the grades detected in the "assay" didn't come from one or two locations.

That's why I've been saying if they can run their scheme on a 5kg sample why not collect distributed 5kg samples from the gabbro unit and test them separately. This would immediately tell you, even with a not totally reliable assay scheme, if the mineralisation is localised or not.

This is pretty standard procedure when collecting surface samples, you sample outcrops individually, you do not combine samples from widely spaced outcrops that might represent different layers of the intrusive rock or different rocks all together (if there has been an error in identification by the field staff). By combining the samples in the way that has been done information has been lost regarding the metal distribution, no matter what assay scheme has been or has not been adopted.

"Drill samples taken now across the tenements allow the application of the current method to indicate the resource presence, and provide bulk samples for ongoing assays as the methodology is refined to allow determination of a JORC resource."

As I've said before quite a few times now, using the current "large composite" assay scheme for drill hole sampling they may be able to make an estimate of total metal content but unless they run the scheme on shorter drill intervals they will never be able to bring that estimate into high enough JORC resource categories to be able to estimate the economics of mining. Re-read my comments about establishing ore boundaries. It's really not a difficult concept.

They say they need to do bulk sampling but in the end the sample subject to the analysis from Tres Estados and Ema weighed only 5kg. This means any 5kg sample can be prepared for the same analysis. That's just logic.

They need to sort out their assay scheme, whatever the problem, to sample drill holes over standard intervals (3m-5m), that way the drilling isn't wasted. A few holes can act as tests. It is not like the cash is not becoming tight so a go slow and conservative approach also fits with the current financial state of the company.Esh