07 and various third parties own theremaining 34

The global economic downturn, coupled with the seasonal slowdownin the rough diamond market, has placed severe pressure on rough diamondprices which have dropped as much as 60 from those seen earlier in theyear.While the current uncertainty in the rough diamond market is an obviousset back to the Blue Gum Project, recent production statistics continue toconfirm the geological model concerning grade and volumes. Further, the NI43-101 compliant independent resource update, prepared by Dr. owns 52.07 and various third parties own theremaining 34.86. Additional informationis expected from Etruscan Diamonds later this month.Falls Grid (gold) - Northern New BrunswickOptioned from local prospectors in December 2007, the Company'sexploration in 2008 focused on looking for new gold mineralization withinthe carbonate - fuchsite alteration zone, which was known to extend forover 4 km across the property. The soil sampling survey identified areasof high gold and arsenic and follow up work consisted of collectingsamples from the overburden/bedrock interface using a portable motorizedsampler in the areas of the highest gold values. Five drill holes weretargeted on gold anomalies generated from the deep overburden samplingprogram. Two holes contained low levels of gold mineralization with thebest zone containing 1.29 gpt Au over a 4 m width.

Consequently, and inkeeping with the Company's efforts to prioritize its best opportunitiesfor growth, the property was returned to the Optionors prior to the firstanniversary date of the option agreement.Little River (gold) - South Coast of NewfoundlandOptioned from local prospectors in September 2008, the Company's initialresults from exploration efforts on the Little River gold prospect havebeen very encouraging. Exploration has focused on establishing a controlgrid for a soil geochemical survey. Mineralized float and subcrop on theproperty exhibit a strong gold - arsenic relationship and this is evidentin the soil anomalies. No historictrenching or drilling has taken place in these areas and they will be thefocus of the 2009 exploration program.Valentine Lake Project (gold) - Central NewfoundlandThe Valentine Lake Property's Leprechaun Pond deposit hosts a NI 43-101compliant inferred mineral resource of 1,314,780 tonnes grading 10.50grams per tonne (g/t) gold. Cutting assays to 58 g/t gold, the averagegrade is 8.51 g/t gold, for a total estimated mineral resource of 443,000ounces of gold at the uncut grade and 359,000 ounces of gold at the cutgrade. The resource estimate of the Valentine Lake property presented inthe NI 43-101 Technical Report dated January 12, 2005 was performed byLarry Pilgrim, P. Geo., a Qualified Person (see: NI 43-101 Valentine LakeTechnical Report).Project development efforts this year focused on establishing a road andupgrading existing roads totaling 40 km to provide access to theLeprechaun Pond deposit.

The road willeliminate the need for helicopters during future exploration programs andprovide access for heavy equipment needed for large tonnage sampling inthe future. The road will also provide access to the property's 25 kmstrike length and the Valentine East prospect located approximately 13 kmNE of the Leprechaun Pond deposit.The Valentine Lake gold project is a joint-venture with Richmont Minesand, consequent to Mountain Lake's exercise of the option to acquiretitle to the Property from Xstrata (see news release of March 27, 2008),Richmont and Mountain Lake own 70 and 30 of the project, respectively.Mountain Lake is the field operator on the project and later this quarterwill be proposing the next phase for the 2009 drilling program focusingon resource tonnage expansion opportunities.Financial TransactionsIn November 2008, Mountain Lake exercised its right to convert $2,000,000worth of interest bearing Convertible Notes (the "Notes"). The Notes boreinterest at 7 per annum and were convertible into 1,000,000 common sharesof Etruscan Diamonds, a corporation incorporated under the Federal laws ofCanada in which the Company holds a minority interest, at a conversionprice of $2.00 per share of Etruscan Diamonds. All accrued interest hasnow been paid and the 1,000,000 shares of Etruscan Diamonds have beendelivered to the noteholders. The price of gold isholding up well in Canadian dollar terms through this difficult period andwe expect it will continue to do well in the future."About Mountain Lake Resources Inc.Mountain Lake Resources Inc.