CIM Questions Resulting from CSA-CIM Committee Meetings (April14, 2008)

"At the May 15, 2006 and the May 1, 2007 Canadian Securities Administrators (CSA) Canadian Institute of Mining, Metallurgy and Petroleum (CIM) meetings in Vancouver and Montreal, CSA requested CIM consider certain issues arising out of the CSA review of Technical Reports and public disclosure, in general, regarding the practice of estimation and reporting of Mineral Resources and Mineral Reserves. The following is a summary of the issues raised by the CSA and the responses of the CIM.Preamble: At the May 15, 2006 and the May 1, 2007 Canadian Securities Administrators (CSA)-Canadian Institute of Mining, Metallurgy and Petroleum (CIM) meetings in Vancouver and Montreal, CSA requested CIM consider certain issues arising out of the CSA review of Technical Reports and public disclosure, in general, regarding the practice of estimation and reporting of Mineral Resources and Mineral Reserves. The following is a summary of the issues raised by the CSA and the responses of the CIM Reserve Definition and the CIM Estimation Best Practices Committees (the Committees). This information is intended to provide the Qualified Person (QP) with further guidance when estimating Mineral Resources and Mineral Reserves and in preparing a technical report written under National Instrument 43-101 (NI 43-101). Several members of the CIM Reserve Definition Committee, the CIM Estimation Best Practices Committee and some members of the Committee for Mineral Resources International Reporting Standards have reviewed these issues and provide the following commentary.Issue 1. - CSA requested CIM review and comment on the selection of an appropriate commodity price to be used in Mineral Resources and Mineral Reserves estimates.Commodity prices are used in the estimation of Mineral Resources and Mineral Reserves and in the economic analysis of a property. In times of rapidly changing commodity prices, or when prices are at the extreme ends of a commodity price cycle, the QP has a difficult job in selecting an appropriate commodity price.• The selection of appropriate technical variables, including commodity price, is clearly the responsibility of the Qualified Person (QP). The QP must describe the reasons for selecting these variables, including price, in the technical report.• The definition of a ""Mineral Resource"" contains the wording ""reasonable prospects for economic extraction,"" therefore, a QP must select economic parameters, including commodity price, that will result in an estimate of Mineral Resources and Mineral Reserves that have ""reasonable prospects for economic extraction""."