Annual and Final report for EL 27218 for the period ending 3 November 2010

Abstract

Section 32 of the Mining Act requires the submission of a Final Report prepared by the titleholder for each surrendered exploration licence. This Final Report (and last Annual Report) for Exploration Licence (EL 27218 provides a summary of the activities carried out over the permit in the past year, including any results produced bythese activities. EL 27218 has been relinquished in its entirety by Tri-Star Energy Company as the company has determined that the coal seam underlying this area is too deep to be economically mined. This licence has recently been joined to a group of licences that were assembled to create a large area that could feasibly be exploited as a coal producing area. The area covered by the group licences will be referred to as the Project Area. Tri-Star Energy Company continues to work on the remainders of the tenures and anticipates that it shall ultimately create a large economic project over the remainder of the Project Area. EL 27218 was granted on 6 November 2009, for a term of five (5) years and is set to expire on 3 November 2014. Tri-Star Energy Company is the sole titleholder of EL 27218 and Tri-Star Coal Operations LLC is the sole operator of EL 27218 and the Project Area. The work program for EL 27218 during its first year required a geological and geophysical review of existing data and information towards determining the location of Permian coals within the Purni Formation and specifically, their depth, thickness, lateral extent and quality. lt also required mapping activities and the determination of a drilling and/or seismic program moving forward. The expenditure commitment for EL 27218 for its first year required an expenditure of 565,000.00. Office-based studies in relation to this tenure and over the Project Area have indicated that the coal is too deep to economically produce within EL 27218. Tri-Star Energy Company has met all work and expenditure commitments for EL 27218 for the term of the licence.