CALIFORNIA/CALIFORNIA WEST

Final analyses of the concentrate samples for tin metal (Sn%) content showed an unexpected distribution of heavy minerals showing an average of 13% SnO2 content versus the expected 85-95% SnO2 observed by previous explorers from parallel creek systems. Based on the results, the agreement to acquire this project was terminated.

As part of the due diligence related to the sales agreement announced on this date, alluvial tin was freely panned by KML from surface diggings at multiple sites along the creek during an initial survey of the leases. The area under consideration for purchase by KML is some 26km in length and varies in width from 50 to 100+m, though the mining leases are limited to 100m in width. KML’s sample program covered the full length of the mining leases (26km) by digging a series of pits across the creek at regular intervals of nominally 1km referred to as “sites”. From each pit a single sample of 20L (equal to 1/50 of cubic metre) volume was taken using a hoe pick and shovel. In all, 148 pit samples were taken from 40 sites with spacing not >50m. Pits were dug to basement below tin-bearing alluvium however in 57 pits the basement was either not reached or could not be clearly identified. The samples were reduced to a heavy mineral concentrate using a centrifugal rotor sluice (Knudsen Bowl) then manually panned to remove excess sand. The concentrates were then submitted for analysis to provide accurate mass and tin content. The total length of mining leases covering alluvial deposits is 26,295m and the mining leases are 100m in width, centred on the creek. Average grade of concentrate (sites): 1,001g/m3 (Range: 273 to 2008); Average weighted depth (sites): 1.91m (Range: 0.45 to 4.50); Average width of alluvial deposits (sites): 83m (Range: 50 to 100m). From this data KML believes that there is potential for an exploration target of 3,000- 6,000t of cassiterite (SnO2) from some 3-6 million cubic metres of alluvial material. Overburden across the leases is essentially non-existent with tin bearing alluvium at surface. Final analyses of the concentrate samples for tin metal (Sn%) content are expected within the next 3-4 weeks.