The discovery of the new Lost Lake Zone demonstrates the exploration potential of the Sherridon VMS Property. The 500 m strike length between holes DH07-56 and DH07-57 falls along an EM conductor that can be traced over 800 m from south of the railroad to the shore of Sherlett Lake. This conductor, identified during Halo's 2006 airborne geophysical survey, is a prime target for additional VMS mineralization and is one of the first of 122 targets, many of which are also in areas where there have been no historical geophysics or drilling.

The Lost Lake Zone is a new discovery at the Sherridon VMS Property.  All intersections are within 150 m of surface.  Drilling has encountered significant mineralization and has proved the continuity of the mineralized horizon from the near-surface environment to approximately 150 m subsurface in the central and western portion of the deposit.  Step-out drill holes to the northeast of the mineralized horizon encountered limited success.  This is now believed to be due to an increase in the attitude of the mineralization from the previously interpreted 40°-45° to greater than 55°.

Drilling programs have been successful in confirming Inferred Mineral Resources at the Lost Lake deposit.  The Inferred Resources total 2.2 million tonnes grading 0.9% Cu, 2.7% Zn, 0.6 g/t Au and 8.9 g/t Ag.  Included within these mineral resources are near-surface Inferred Resources of 2.0 million tonnes grading 0.9% Cu, 2.7% Zn, 0.5 g/t Au and 8.9 g/t Ag which could potentially be mined by open pit methods.