Royalties

Bearing holds a royalty on the Boundray deposit at Imperial Metals Corp. Mt Polly mine. The royalty is based on tonnes that are milled from a portion of the Boundary deposit. The royalty is $2.50 per tonne for the first 400,000 tonnes of material milled and then $1.25 per tonne for all tonnes milled in excess of 400,000 tonnes. The royalty per tonne in excess of 400,000 tonnes milled can be reduced to $0.62 per tonne by Imperial making a payment of $1,000,000. In accordance with the underlying Lloyd agreementthe Bearing is entitled to 90% of the aforementioned option payments and royalty payments.

Imperial is currently preparing an open pit mine plan for the deposit as well as conducting underground exploration on the deposit to test its depth extensions. Imperial has completed a 500 metre ramp to provide access for underground drilling of the high grade mineralization in the Boundary zone at depth. This drilling is now underway. Following the drilling Imperial intends to complete the design of a test stope to mine in 2011 to confirm an appropriate underground mining method for the Boundary zone mineralization.