Silk Energy Ltd SLKEF

Cleaver Agreement ...Drills are turning

[whaler]

Cleaver is well underway:
This is info written as of period ending June 30/09

"In June 2007, the Company entered into an option agreement (the "Cleaver Agreement") with an arm's

length party to acquire an 100% interest in certain mineral claims located in the Porcupine Mining

Division in the Province of Ontario (the "Cleaver Property"). The Cleaver Property consists of 13

mining claims containing 192 mining claim units and is located in the northeastern portion of Cleaver

Township, the southeastern portion of Fallon Township, the southwestern portion of Fasken Township

and the northwestern portion of McNeil Township. Pursuant to the Cleaver Agreement, the Company is

required to:

i. pay the sum of $38,000 on the date of execution of the option agreement (which has been paid);

$60,000 by December 13, 2007 (which has been paid), $90,000 by June 13, 2008(which has been

paid), $150,000 by June 13, 2009 and $300,000 by June 13, 2010;

ii. expend on exploration and development of the Cleaver Property the following amounts:

$200,000 by December 13, 2007 (which has been expended), $300,000 by June 13, 2008(which

has been expended), $400,000 by June 13, 2009 and $500,000 by June 13, 2010; and

iii. the Company granted to the vendor a 3% NSR royalty. The Company has the option to purchase

2% of the NSR royalty for an aggregate payment of $2,000,000 at any time until June 13, 2017."


"Exploration Operations

- Langmuir Property: Due to the more advanced state of exploration and the promising results of the Company’s Langmuir Property, this project – along with its Cleaver and Douglas Properties --, continues to be, the principal focus of the Company’s resources and attention. During the fiscal quarter just ended June 30, 2009, the Company has been actively involved in four functions. One has been the analysis of its past exploration data to determine the amount and recoverability of resources discovered and delineated to date. The second has been the pursuit of its application for dewatering and underground exploration of the Langmuir No. 1 mine. The third has been pursuit ofthe application to convert the mineral claims to a mineral lease. The fourth  has been the collection of the time sensitive and long lead time baseline data required to support approval applications related to the Projects on that property. A more detailed discuss on the current activity appears under “Performance Summary” below."

- Cleaver Property: The Cleaver Property, which is one of the claim groups whose rights were recently acquired, consists of 13 mining claims containing 192 mining claim units and is located in the northeastern portion of Cleaver Township, the southeastern portion of Fallon Township, the southwestern portion of Fasken Township and the northwestern portion of McNeil Township. The property is accessed by an all weather gravel logging road approximately 46.75km south of Highway 101 at South Porcupine, Ontario. The Company has recently mapped and performed surface studies on this property. Previous exploration activities utilizing Reverse Circulation Drilling (RCD) within the central portion of the property returned values in the overburden ranging from 0 ppm up to 3,110 ppm (0.30%) of copper and from 0 ppb up to 521,460 ppb (15.209 oz/t) gold. The known Flinsky copper-zinc showing is located approximately 2.3km southwest of the property.

The Company commence its own reverse circulation diamond drilling of this property and, to date, has completed 22 drill core holes on the property. At the present, no assaying results from any of those holes have been completed for release. Somewhat more detailed information is contained below under “Performance Summary”.

"Exploration activity has increased on the Cleaver and the Douglas Properties lying approximately five miles to the south of the Langmuir Property. Topographic mapping and compilation of that area, as well as logging and

sampling of the core holes drilling to date on those properties is currently in progress as well. Based on the

preliminary information gathered the Company is proceeding to expand its claim holdings in that area.

In that regard it is in the process of bringing under the Company’s control six additional claims encompassing 88 claim units totaling approximately 1,400 additional hectares. When completed, the new claims will include the entire gap between the Cleaver and the Douglas Properties and will include the claims adjacent to the eastern, northern and western borders of the Douglas Properties."