An in-depth Analysis of Pitchstone Exploration with Ted Trueman, President and Chief Executive Officer
Sunday, January 28, 2007

On a recent Sunday we had the chance to sit down with one of the most respected Exploration Geologists in the uranium industry. Ted Trueman sat down with us and discussed his company, Pitchstone Exploration, along with what he sees as the industry evolves from the ashes of the last boom and bust cycle.

Mr. Trueman established Pitchstone with a small group to stake the most promising land in the Athabasca Basin when there was literally no competition. Due to their foresight, as well as the long downturn in the uranium market in the years before, they were able to claim the most promising projects before others even thought of staking the land for themselves. Some four years later this foresight is paying off as the company has successfully joint ventured many of their projects, and are ahead of many peers in the drilling phase. Expertise seemed to be a recurring theme in our conversation with Mr. Trueman and Pitchstone has many knowledgeable people associated with the company. This is going to be very important going forward as projects become harder to come by and companies will need to have people capable of decided whether a property is promising as well as managing all aspects of the mining process.

-theinvestar:  This past year saw many milestones reached by Pitchstone as positive drilling results were reported and new properties added to the portfolio. Can you give us your perspective on the year to come?

Ted Trueman:  We will have a very aggressive 2007. We have budgeted for approximately 16,000 meters in the Athabasca Basin, in part with JV partner sxrUraniumOne We have eight projects in the Athabasca Basin with three 100% owned by Pitchstone and the other five 50-50 with sxrUraniumOne. The budget for the SXR JV Properties is approximately C$4.5 million which for the most part will be diamond drilling. In the Hornby Bay Basin we are Joint Ventured with Triex Minerals on five projects in the general Great Bear Lake area. We will have approximately 5,000 meters of diamond drilling for 2007 on these projects, including a few holes to test one portion of the already partially delineated Mountain Lake Deposit, which has an Inferred Resource estimated to contain a little over 8 million lbs. of uranium. In Gabon, where we and Cameco are earning an interest from Motapa Diamonds, we have contracted for an airborne survey, but have not formally adopted a 2007 program. We will however be meeting with Cameco and Motapa shortly in that regard. We are still in the due diligence process for the three Namibian projects at this time.

-theinvestar:  Pitchstone is involved in many exploration stage projects around the world, where do you expect to make the most progress this year?

Ted Trueman:  We started in the Athabasca Basin and that is really the roots of Pitchstone. It has always been our roots, due to acquiring great properties early on, and this has always been our number one focus and will continue to be our main focus going forward. We have a lot of targets, and although we have a very aggressive exploration program in 2007, that will not come close to testing all of our targets in the Athabasca Basin. The Athabasca Basin is our reason for existing and we will be there for a long time. We will also be conducting a significant drilling program in the Hornby Bay Basin to test a number of targets.

-theinvestar:  A few months ago we spoke to your Investor Relations Department and they felt that the stock was undervalued vs. its peers. After an amazing run, how do you perceive Pitchstone’s valuation in relation to its peers?

Ted Trueman:  I think the share price has behaved like many other junior uranium companies’. It was down through the late summer and early fall, and then late October our share price and many others companies’ turned around and gained appreciably. So we have gained appreciably since late October until now. I don’t think we spiked up so much as recovered from being beaten up from last summer. We also forced our IPO warrants last August to clear them out of the way and we anticipated that would not help the stock price and it didn’t. So we haven’t really spiked up recently as much as recovered from last year. For the peer group, if you look at our properties and expertise and our current market cap, we are undervalued, or they are overvalued. We are not quite in-sync with many other junior uranium companies, so in that context I think there is plenty of room for Pitchstone to move.

-theinvestar:  Darby-Candle appears to be your most advanced early stage exploration property. To date you have encountered uranium mineralization around the unconformity, but can you explain the process going forward of locating “The Motherload.”

Ted Trueman:  Yes. First, investors should appreciate that this process does not happen overnight. These are very high grade deposits we are exploring for, which due to the high grade are very compact. You have to gradually zero in on them due to the small size of the deposits. So first you conduct ground surveys, and then drill to test the anomalies. Although these deposits are quite small, they generally have a larger alteration footprint and the alteration helps us zero in on the mineralization. In general the process entails geophysical surveys, several phases of drilling and often additional geophysical surveys. I would not hazard to guess as to when we might find somewhat more significant uranium, but it’s quite a slow process in terms of building up the picture.

-theinvestar:  Is Pitchstone actively seeking JV partners for the Fisher, Fireweed and Gumboot Projects, or will the company forgo that route and keep them in-house through the exploration process?

Ted Trueman:  Good question. We have been approached by a number of companies, some very well established companies, to JV some of our projects. We’re taking the view that we would like to upgrade these projects, get our data together better, and know a little more in what we have and what we are dealing with before we JV them. So the answer is yes we would look at JV partners on these projects, just not right at this time. We are committed by the flow through financing we did last year to fund them 100% in 2007. So further joint ventures won’t likely happen this year. I think if we can upgrade them we can command better terms for any deals we do.

-theinvestar:  Pitchstone’s Mountain Lake JV with Triex Minerals has 8.2 million lbs. and your 20 hole drill program in ‘06 increased the known mineralization. What do you believe is the potential for this property going forward?

Ted Trueman:  Well first it is important to understand that an updated estimate of the resource has not been completed. We drilled a few holes in the deposit area to make sure that what we thought was there actually was. That was phase one, and all holes drilled in the resource area did in fact encounter uranium mineralization. The second thing we did was drill some holes under a small lake on the edge of the resource which had not been tested before, a lake called Fran Lake. That was successful in finding previously unknown mineralization. The third component of that initial drill program was to test another target called Jenny Lake. We did that and got anomalous mineralization, low grade uranium, but an area that needs more work. We think our best hope in adding to the Hornby Bay Project is to further test various other targets. We need to add more lbs. before we can really seriously look at a commercial operation, however, there are numerous very good targets so the potential of finding additional mineralization is very good.

-theinvestar:  How large of a resource do you estimate is needed in order to proceed with constructing a mill and mining the Mountain Lake deposit?

Ted Trueman:  That’s a good question and one that I cannot answer, because we have not even done a scoping study on the project to know what that number would be. My gut tells me that it would probably have to be a couple times the size of Mountain Lake to make it fly, but that’s just a wild estimate.

-theinvestar:  It seems Pitchstone acquired their properties in Canada early before prices for good parcels rose dramatically. Is this same blueprint being used on the African continent now?

Ted Trueman:  It’s certainly been the primary reason for our success I believe. We were early in the Athabasca Basin, the Hornby Basin, and more recently the Franceville Basin in Gabon. In Gabon we made the deal with Motapa and invited Cameco in and to my knowledge no other junior company was exploring for uranium in Gabon at the time. I think we have been able to do this because, and this goes back to one of the key fundamental elements for juniors, expertise. Our expertise helps us bring in top notch companies to our projects, such as SXR and Cameco. It is important to understand that we are not acquiring someone else’s low priority projects, but rather bringing these companies into our projects.

-theinvestar:  In Gabon Pitchstone has acquired a very large land position in the Franceville Basin through their JV with Cameco and Motapa Diamonds, can you explain the exploration that has taken place, what will take place this year, and a timetable on drilling?

Ted Trueman:  Only in a general sense. It is not a JV yet, because Cameco and ourselves are still at the earn-in stage. Again, this is early stage exploration work and we have initiated some work, primarily engaging a South African company to do airborne surveys. Currently, plans for this year have not been formalized, but we hope to do some drilling early on, perhaps in 2007. These holes would be designed to help us better understand the geology.

-theinvestar:  Pitchstone recently entered into an agreement to engage in uranium exploration in Namibia where there are currently two mines in production with a third planned. Can you tell us where the property is located in regards to the producing mines and give us any property history?

Ted Trueman:  There is not a lot of history, and these projects are best considered conceptual. They are actually three separate properties with one in the south, one in the northwest, and the last in the west about 70 km from Rossing. I can’t say a lot about these projects because it is early on in the exploration process. The western project is a Rossing type target.

-theinvestar:  Moving on to finances, how will Pitchstone go about funding their projects once SXR has earned their interest and your current cash balance begins to dwindle (issue shares, or lower % in projects)?

Ted Trueman:  Well a couple of points in that regard, SXR has earned their interest in the five Athabasca Projects and starting in 2007 we will begin financing our share of the projects. In terms of financing we currently have a bank balance in excess of C$10 million and at current burn rates that is approximately two years. Going forward there are two options, the one that you brought up earlier with joint venturing some of our other properties and the second being a treasury issue of shares.

-theinvestar:  Going forward, will Pitchstone achieve its growth targets through organic growth or be an acquirer or seller of assets?

Ted Trueman:  There are certainly opportunities to add more projects and we have to evaluate them as they develop. Success usually comes from the amount of work you do in terms, specifically in our business, of drilling. We are doing a lot of drilling, probably more than, and I’m guessing here, probably 90-95% of the uranium juniors. It’s impossible to speculate where we will be in a year or two, but certainly there has been huge changes in the past year and I see no reason why that will be any different going forward.

-theinvestar:  You said earlier that Pitchstone has been approached by companies willing to form potential JV partnerships, but has Pitchstone been approached by anyone willing to buy the company?

Ted Trueman:  That’s a very sensitive issue and not something I really want to discuss.

-theinvestar:  Every investor who is in some part involved in the uranium sector is wondering what is going on with Cameco’s Cigar Lake Mine since the flooding on October 23, 2006. Could you lend us your opinion on the situation?

Ted Trueman:  Will they get it under control, I think they will. They seem to be making progress and are pouring concrete at this time and attempting to seal off the flow. If they can get the drill holes in the right place and plug up the drift that did collapse, then they should be able to pump out the mine. I think it’s a delay rather than the end of Cigar Lake. Some have suggested that the mine is lost, but with the value and importance of this asset I believe that they will continue to move it forward.

-theinvestar:  Finally, should you find an ore body resembling McArthur River or Cigar Lake, are you or any of your JV partners equipped with the personnel and expertise to undertake such a project?

Ted Trueman:  Well we are growing fast, but that would be a quantum leap to get to a production level. However it would be gradual over time a long time as the deposit was built up, which would allow Pitchstone to grow with it. We have an excellent relationship with majors in the Athabasca area and if we found anything in their backyard we would probably be talking to them fairly early on.

-theinvestar:  Alright Mr. Trueman, is there anything else you would like to add?

Ted Trueman:  I think that the key to Pitchstone’s success is that when we started there were only perhaps a dozen or fourteen companies exploring Canada for uranium, including the likes of AREVA and Cameco. Now, world-wide, I am told that there are about 450 organizations searching for uranium. I think that it is really difficult for any individual investor to look at this large number and decide which companies really have their acts together. This all goes back to the significance of uranium expertise, which is the most important component. Expertise leads you to the second most important item, which is the acquisition of well located properties. So if you don’t have that expertise, you wouldn’t likely have acquired quality projects early, and once you got the projects it would be difficult to know how to logically explore them. Investors should take the time to ask if a company has expertise and if so, inquire as to where, when and with which companies the individuals obtained that expertise. Next they should look at when the company was acquiring properties because it if was early on, prior to the rush starting in August-September 2004, they probably know what they are doing.

-theinvestar:  Well thank you for joining us today Mr. Trueman.

Ted Trueman:  My pleasure.