Pa 361125

Press Release April 2006

FlexIT introduce the new direction in downhole survey tools-

GYROSMART Field tests a huge success Never before has such a revolutionary system been used. The size of the gyro sensors is remarkably small and to the surprise of the testing team the results shown below out performed all expectations. The GyroSmart will completely change the way downhole surveying is carried out today, providing highly accurate azimuth and dip data from inside the drill string Mike Ayris, Managing Director Downhole Surveys said. Not since 1974 when Claes Ericsson first introduced the Fotobor has such a revolutionary design change in downhole surveying equipment been developed and made available to the mining and civil engineering industry. Ericsson has been in the downhole surveying industry manufacturing instruments for 32 years developing a range of leading edge multishot survey instruments that are now in daily use in exploration, mining and engineering projects around the world. The GyroSmart uses Imegos MEMS gyro sensor Claes Ericsson of FlexIT in Sweden has once again created what many thought was impossible. The GyroSmart downhole survey tool has been designed together with a development team at Imego AB, which is an independent contract research organization engaged in sensory systems development. The GyroSmart uses Imegos highly advanced MEMS (Micro-Electro-Mechanical System) gyro sensor. This is known to the market as the IBG10, Imegos digital Butterfly Gyroscope, and is exclusively licensed to FlexIT for borehole surveying.

Photo: Manoo Eibpoosh/Imego

Photo: Manoo Eibpoosh/Imego

The sensor package is so small it fits on your index finger. GyroSmart: the size of the electronics section.

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Testing the GyroSmart To prove the functionality of the GyroSmart, two prototype tools were run at a test facility over two days in Sweden to a depth of 790m in early April 2006. The hole had been drilled to 800m at a dip angle of -55 degrees with the top 100m of the hole steel cased ranging in sizes from 300mm to 76mm, thus creating a challenge for any survey instrument. The GyroSmarts were housed in standard 38mm brass running gear and run In and Out of the hole at a speed of 20 metres per minute. At each 10 metre survey station the GyroSmart was held steady for 10 seconds allowing the system to become stationary before moving to the next station. The total time taken to survey In and Out the 790m drill hole was 1 hrs. Unlike other Gyro Systems the GyroSmart requires no surface calibration. The surface computer and GyroSmart are initialized through blue tooth communication within seconds. For the purpose of the trial and due to surface freezing conditions the GyroSmart assembly was placed in the water filled borehole for approximately 10 minutes to stabilize to the in-hole temperature.

Photo: Mike Ayris/Downhole Surveys

The GyroSmart field test team at the test hole in Sweden. From left: Dr James Tweedie, GeoMEM, software developer; Claes Ericsson, Owner of FlexIT, Dr Duncan McLeod, Imego, Navigation Specialist and Dr Dag Billger, Imego GyroSmart Project leader.

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The results GyroSmart surveys compared to a known hole produced by SKB from various surveys from other tools believed to be accurate.

Northing:Easting:Elevation:

Bearing (degrees):Inclination (degrees):

Length:

Drilling reference point

Orientation

Borehole

6699542.07 (m), 1631404.52 (m), 2.95 (m),

RT90 2,5 gon V 0:-15 RHB 70

35.04o

-54.90o

800.24 m

RT90 2,5 gon V 0:-15 Drilling start date: 2005-11-21 Drilling stop date: 2005-12-05

Drilling start date: 2006-02-04Drilling stop date: 2006-02-18

Percussion drilling period

Core drilling period

Technical dataBorehole KFM01D

Gap injection (cement)

Reference point

Reference level 0.00 m

Referencemarks (m):

150200250300350400450500550600650700750

Soil cover approx. 7.55 m

o/i

= 323.

9/309.

7 mm

(bor

ehole)

= 339

mm

o/i

= 208.

0/200.

0 mm

(bor

ehole)

= 245.

0 mm

o/i

= 208.

0/170.

0 mm

(bor

ehole)

= 160.

0 mm

(bor

ehole)

= 86.0

mm

(bor

ehole)

= 75.8

mm

800.24 m

91.48 m

91.16 m

89.77 m

89.72 m

89.49 m

89.44 m

86.40 m

11.61 m

Rev 2006-03-01

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Repeatability From 6 x 790m In and Out runs:

Azimuth 0.39 Inclination 0.26 Accuracy Data Average data from

8x790m surveys In and Out runs

Reference Survey Differences

Azimuth 30.98 31.09 0.11 Inclination -45.09 -45.12 0.03 North 9960.16 9960.29 0.13 East 1682.41 1682.54 0.13 Elevation -605.25 -605.12 0.13 Statistics The differences between In and Out surveys were used to produce a total of 7 sets of difference data for both Inclination and Azimuth. The basic statistics (Mean and Standard Deviation) were calculated for each for data from 0 to 790 metres and from 150 to 790 metres (to lie in the zone of the holes unaffected by the initial cased section). The mean of the Standard Deviations for all the Inclinations and the Azimuths were calculated to show the average variation for these items overall: Station range Inclination Std.Dev.(deg) Azimuth Std.Dev.(deg) 0 - 790 m 0.26 0.39 150 - 790 m 0.14 0.29

This shows:

1) An improvement in data quality if the bad initial section is removed from the calculations.

2) An average Standard Deviation of 0.14 for Inclination. This is almost at the level of resolution for the GyroSmart.

3) An average Standard Deviation of 0.29 for Azimuth. Twice the level of Inclination but still a very low variation between surveys.

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Inclination (Individual surveys against depth): This plot shows that the GyroSmart inclination data is consistent and repeatable with different instruments and on different days.

0 100 200 300 400 500 600 700 800Depth (metres)

-57

-56

-55

-54

-53

-52

-51

-50

-49

-48

-47

-46

-45

-44

Incl

inat

ion

(deg

rees

from

hor

izon

tal)

InclinationReference SurveyRun2B_Beta2_INRun2B_Beta2_OUTRun3B_Beta2_IN(Corr)Run3B_Beta2_OUT(Corr)Run2C_Beta2_INRun2C_Beta2_OUTRun5C_Beta1_INRun5C_Beta1_OUT

GyroSmart tests: 3rd & 4th April 2006.INCLINATION plots with depth compared to Reference Survey. Common orientation data is at 300m.

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Azimuth (Individual surveys against depth) This plot shows slightly more variation than the inclination plot but is still very close to the Reference survey apart from the bad zone at 0 to 100m.

0 100 200 300 400 500 600 700 800Depth (metres)

30

31

32

33

34

35

36

37

38

39

40

41

Azi

mut

h (D

egre

es)

AzimuthRun2B_Beta2_INRun2B_Beta2_OUTRun3B_Beta2_IN(Corr)Run3B_Beta2_OUT(Corr)Run2C_Beta2_INRun2C_Beta2_OUTRun5C_Beta1_INRun5C_Beta1_OUTReference Survey

GyroSmart tests: 3rd & 4th April 2006.AZIMUTH plots with depth compared to Reference Survey. Common orientation data is at 300m.

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GyroSmart Benefits Gyro survey tool Surveys inside steel rods and open hole

with magnetic zones Operates at all angles 3 Gyro sensors provide Azimuth and Dip

data from any hole vertical to horizontal No Conductor cable required GyroSmart uses onboard memory and a

rechargeable battery pack No cable Head Swivel and D clamps attach cable to top of

GyroSmart No Slip Rings Can operate on any cable type or drill rods Less Rig downtime No surface calibration required Fast survey time Operates at 30m/min with 10 second stops

per user defined survey interval. Results available at rig Easy post processing using field computer Rugged MEMS Gyro sensors Sensors rated to 6000g shock level. Slim Barrel The GyroSmarts OD measures just 32mm

And fits into 38mm and 45mm running gear

Independent QA check 3 x magnetometers measure XYZ providing independent magnetic Azimuth check (Only useful in non magnetic environments)

Less Capital equipment required GyroSmart will operate on any cable and winch fitted with a mechanical or optical depth encoder. No expensive conductor cable or cable head required. In most cases drill rigs wireline will be sufficient

Where to from here The GyroSmart tests have proven beyond doubt that the system is accurate and functions well. Further field trials will be completed in Kalgoorlie Western Australia mid May 2006. The next stage is to produce a batch of 50 as the first production run to be completed end of June 2006 Orders for some 40 GyroSmarts have already been received from around the world. The GyroSmart will be commercially available from FlexIT help centres located worldwide by June 2006.

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Birgitta and Claes Ericsson proud owner of Flexit during the Launch of the Gyro Smart at

the PDAC in Toronto March 2006. For further information please Contact: Flexit AB ( Sweden ) Claes Ericsson [email protected] Ph +46 (0)851430362

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