Annual exploration report year 10 mineral lease ML 1154 Merlin 15 June 2007 to 14 June 2008

Abstract

Activities completed during the reporting period included the completion of thirteen diamond drill holes for a total of 3,674 metres. In addition fourteen samples of drill core were processed to recover diamonds for grade determination. Sixteen kimberlites samples approximating one cubic metre in size from within the open mining pits were collected and processed for diamonds for grade determinations and comparison with deeper core samples. This work was undertaken to confirm the continuation of grade with depth. Total expenditure amounted to $2,234,000. It is proposed that further resource drilling and sampling be undertaken during the next reporting period prior to commencing feasibility studies.