Dear Fellow Shareholders,

2010 was a year of challenges and opportunities for your Company as we restarted operations at the Magellan Mine and began the execution of our corporate growth strategy with the Prairie Downs Project.

In February, 2010 we reached a significant milestone with the restart of operations at the Magellan Mine, located in Western Australia. Our product transportation from the mine to and through the Port of Fremantle used an industry-leading containerized process developed by Ivernia for the safe transport of lead carbonate. We overcame early challenges in the ramp-up of operations and successfully achieved quarter over quarter increases in production and lead recoveries. Our annual production for 2010 totaled approximately 44,000 tonnes of contained lead in concentrate. Lead recovery for the year averaged 74%, with a 78% recovery recorded in the fourth quarter.

Unhappily, following the receipt of a Government order to cease transport operations from the Magellan Mine on December 31, 2010 all operations were shut down for much of the first quarter of 2011. Following a brief resumption, the mine was placed on care and maintenance in April, 2011. As we go to press, the Company continues to investigate the series of events related to transport operations that resulted in our decision to place the mine on care and maintenance. Meanwhile, we have embarked on a comprehensive end-to-end review of all activities related to the Magellan Mine, including the mining, processing, transporting and management of lead carbonate production and export. The Company will be in a position to report more fully to shareholders once our investigations have been completed and the end-to-end review has made more progress.

In March, 2011 Ivernia announced the results of a new independent National Instrument 43-101 Technical Report for the Magellan Mine. This included a significant increase in mineral resources and reserves from those reported at the end of 2009, including an 87% increase in tonnage and a 76% increase in contained metal in measured and indicated resources and a 42% increase in tonnage and a 45% increase in contained metal in mineral reserves (all after adjusting for 2010 mined production). The Technical Report highlights that the Magellan Mine has a life of over ten years, which includes eight years of mining and over two years of processing stockpiles.

The next step in our corporate growth strategy was accomplished in June, 2010 with the signing of an earn-in agreement on the Prairie Downs Project, located approximately 250 kilometers north of the Magellan Mine. We successfully completed a phase one drill program at Prairie Downs in late 2010, and in January, 2011 announced the discovery of a new high-grade zone of zinc-lead-silver mineralization outside the known resource area. With these encouraging results from our first phase of drilling, the Company commenced a follow-up drill program in the second quarter of 2011.

As we look back over the last year we have had both successes and disappointments. At the Magellan Mine, the updated Technical Report highlighted the scale and robust nature of the ore bodies. Our next challenge will be to assess how to best mine and process th is valuable deposit and continue to ensure the safe transport of our product – all in accordance with the highest international standards. At Prairie Downs, we made a significant new discovery in 2010 and we look to build on that success in 2011.

We would like to thank all our employees in Australia and Canada for their hard work and professionalism throughout this last year. We have added a number of highly talented people to our management team which will serve to strengthen the Company as we move forward.

In closing, we appreciate your support and loyalty over the past year and look forward to the continued support of our shareholders

Sincerely,