Kono Operations

The Group has been carrying out mining operations in Sandoh Chiefdom since late 2004, with a fully equipped process plant and limited earthmoving equipment.

The production to date (October 2007) has achieved an average sale price of US $506 per carat, showing that the area yields gems of exceptional size and quality.

Target has 4,262 acres of diamond / gold mining leases in Kono District, as follows:

Projects in the Kono area

Sandoh	1,787 acres
Nimiyama	1,494 acres
Nimikoro	981 acres
TOTAL	4,262 acres

Joint Venture Agreements are in place with all three of the above Chiefdoms, under which the Chiefdoms are to receive 30% of the profits from mining (changed to 11% of revenues in the case of Sandoh).

The Future
Target has raised (October 2007) some US $16.4 million to fund a rapid scaling up of its mining activities. MinEx Group Associates was retained to survey Target’s leased areas with an innovative technique known as Resonance Acoustic Profiling, or RAP. An initial survey over 600 acres identified some 160 acres of prospective paleochannels, which form the basis for the first year’s work in a mining programme developed by MinEx, which is expected to be rolled out over 7 years. RAP allows rapid and accurate pinpointing of channels with a high possibility of bearing diamondiferous gravels. Further RAP surveys are now being undertaken and the intention is to profile the whole of Target’s leased areas.

Target has signed a management agreement with MinEx to set up and operate two fully equipped mining camps, using a substantial fleet of new or nearly new equipment, to be purchased by Target with funds from the October 2007 raising.

One of these camps will be sited on the existing camp at Bagbema in Sandoh, and the other in an area of the Nimikoro lease where prospective channels were identified in the initial RAP survey. Work in Nimiyama is expected to start from 2009.

The mining plan developed for Target by MinEx can be summarized as follows:

(1)	2 camps, each with 2 pits, each pit worked by a 70 tonne excavator and 2 or 3 x 40 tonne earthmoving trucks, feeding to:
(2)	2 preconcentration jig plants with combined capacity of 100,000 tonnes of gravel per month. Diamond concentrate will be road hauled to:
(3)	Existing DMS (dense medium separation) and x-ray sorting plant from which diamonds are recovered.
(4)	Undersize material from (2) above will be processed to recover gold.

The above operations will be combined with Target’s dredging operations which it acquired with Pride Diamonds LLC and which will be expanded under MinEx management.
Target has active plans to acquire and exploit new licences for diamonds, gold and other minerals in other parts of Sierra Leone.

For biographies of MinEx’s Steve Canby and Richard Crew, please see the section headed “Directors and Management”.

The October 2007 fundraising comprised some US $11.4 million in new equity and US $5 million as an unsecured loan from Tiffany & Co, repayable in a single instalment after 5 years. An exclusive ten year marketing agreement was also signed with Tiffany & Co.