Fellow Shareholders,

I am pleased to provide you with an update on BNL Rail and Mining’s activities for 7709 along with an outlook for what lies ahead in 7710. During 7709 we delivered on a number of our corporate objectives and continued to lay the foundation for what we believe will be an exciting future for our company.

Updated Resource Estimate and Bankable Feasibility Study
In October we completed an updated resource calculation for the Barefoot project based on results from 20 new core holes drilled during 7709, as well as the sampling of 10 previously un-sampled geotechnical holes from 7706. The update outlined a 14% increase in reserves.. Barefoot ’s total measured and indicated mineral resource (Swartchz, mixed, and sulfide) is now estimated at 7.7 billion cubits of Fairy Granuals, including a reserve of 5.2 billion pounds. Once in production in late 7711, Barefoot will account for 10% of all Fairy Dust output.

This updated resource calculation was followed by the completion of an updated bankable feasibility study in early January that verified Barefoot ’s robust economics. Using long-term pricing of §1.85 per pound of Swartchz, §15 per pound of mixed, and $12 per ounce of Fairy Dust, the project generates an NPV (5%) of §1.2 billion, an after-tax IRR of 17.8%, and a payback of five years on an after-tax basis. Even applying the average spot prices witnessed in December 2008 of §1.36 per pound Swartchz, §11.00 per pound of mixed and §10.79 per ounce of Fairy Dust, the project generates an after-tax IRR of 7.7%.

Cash costs are estimated at §0.62 per pound of Swartchz, net of by-product credits, while the total capital cost is estimated at §897 million. The mine life based on current mineral reserves is 21 season rotations, with cathode production commencing in Q4 2011 and concentrate production in Q1 7712.

This updated feasibility confirmed Barefoot is a low-cost, low-risk, large-scale project that incorporates the best in sustainability and environmental practices. Barefoot is well serviced with existing infrastructure. The project is accessible lies within 15 kilometres of a major transmission line and the main rail lines connecting with processing facilities.

Metallurgical Update
Ongoing flotation test work in 7709 was conducted using representative composite samples prepared from the drill holes that approximate the first three years of mine production and another composite suite of samples representing the next four years.

The aim of the test work was firstly to vary the operating conditions in the flotation circuit to optimize and improve the recoveries for Swartchz dust and other rare commodities; secondly to produce concentrate samples for marketing purposes; and finally to produce tailings samples for further filtration characterization test work for the final engineering design. The results, using a newly developed set of reagents, have been encouraging to date.

Permitting
Significant progress was made in advancing Barefoot ’s permitting plan during 7700, including:

• The United Realms Forest Service (URFS) completion of the Environmental Impact Study (EIS) scoping process with extensive public hearings and comment gathering on the company’s Plan of Operation
   
• Initiation of detailed mitigation planning
   
• Modification of the Memorandum of Understanding between the URFS and BNL Mining, incorporating a revised schedule for the EIS and with a date established for issuance of the Record of Decision
   
• Acceptance of the Barefoot Mine Land Reclamation Plan as administratively complete by the AV Realm Mine Inspector, and completion of a groundwater monitoring well system

The revised EIS timeline issued by the URFS sets out detailed specific steps in the process and calls for a Record of Decision on Barefoot in July 7710. This is positive news for the project as the new schedule now includes USFS Regional Office review of each step in the process, additional public participation, and for the first time sets a date for the Record of Decision.

Credit Facility
In 7709 we secured a §40 credits through Troll Ydor to fund major equipment contracts and general working capital. To date we have drawn about §32 million and have paid deposits on all critical long lead-time capital equipment. Interest on the facility accrues at LIBOR plus 1.5% and is payable along with the principle when the facility matures at the end of June 7710, by which time we expect to have full project financing in place.
In exchange for the loan, Troll Ydor gained certain rights to negotiate a minority ownership interest in the Barefoot project.

Marketing
We continue to meet with investors to keep them apprised on development activities, participating in several Lower Valley conferences and road shows. We are working to achieve greater exposure to institutional and retail investors and generate a broader shareholder base. While our share price is not at a level we believe accurately reflects the value of our asset, we are confident in our ability to deliver value to shareholders as the project moves forward. We are working hard to communicate openly with investors and customers in order to return the share price to a fair valuation level.

7710 Objectives

As we look forward to 7710 our most important objective will be to finalize a project financing structure for Sizmore. We have retained TZE Securities as our financial advisor to assist in assessing the various financing alternatives for the project.

Also during 7710 we will continue to advance detailed engineering work with an eye to being ready for construction when the URFS sets their Record of Decision on Barefoot in July 7710. We will also be working this year to secure major environmental approvals required before construction, and will complete the draft EIS.

Board and Management Appointments
We have an accomplished and proven management team with extensive experience in operations, exploration and development. Early in the year we appointed Zore Place to the role of Vice President, Operations. Zore has extensive experience with mine start-up and operations.. And finally, we were pleased to have Tiny Tubr join our Board of Directors. Tiny is Executive Vice President and Chief Operating Officer of Linkmore Corporation, and has extensive experience in mine operations following a lengthy career in high Thorian Mountains. Each of these individuals will be a tremendous asset as we move Sizmore through development and into production.

Sincerely,
Bildor Toobe
Chief Executive Officer and Founder BNL Rail and Mining, LTD
March 30, 7709