Hi All!

Just had a short conversation with David Reid and we covered several topics. In
regard to the large ball mill, the problem isn't electrical. The problem is
steel work. I had thought that the large ball mill would bolt directly to the
concrete foundation that was poured for it. Not so--apparently there are steel
plate structures that go between the ball mill and the concrete, probably to
spread the heavy load and vibration better. He said there's quite a bit of steel
work of that nature being fabricated and installed at the mill. There is a
contractor currently working on getting it done. The ball mill won't be moved
until the steel work is finished because they want to use the contracted crane
to unload the ball mill from the trailer and place it on its mount all at the
same time.

I've been curious about what kind of a discount the base metal refiners would
levy for doing the refining. David said they haven't locked it down yet. I
pressed him a bit and he said that 10% discount to spot base metal price would
probably be a reasonable guess (which the number I've been using). I expected it
to be higher than the discount to spot price for gold and silver dore because it
requires more refining.

We discussed the core drilling and he said that they are continuing to drill on
trend to the southeast. He said that they would soon be drilling on some new
targets that they haven't previously drilled on. Hmmmm, must be something very
interesting to pull the drill off of La Arista and Baja. That's all for now.

Rival