EAST AFRICAN OIL EXPLORERS ARE WORTH WATCHING
E. A. SCHILLER

The market provided little joy to investors this spring and the "sell in May and go away" syndrome
prevailed like always and computer screens were red with low stock prices across the board. We all
expect a market turn around and the opportunity to buy low and in the future sell high or at least higher
than current prices. Precious and base metal stocks took a beating and the uncertainties in Europe did
little to give confidence to holding equities or bullion in ones vaults or under mattresses. I suffered the
consequences of Malicious May and expect some improvement in the days forthcoming. The only joy I
can report is from two oil stocks drilling away in distant lands, normally not considered prospective
domains. In Kenya, African Oil Corporation (AOI-TSX-V; OMX Nasdaq-Stockholm) continues to trade at all-time highs based on phenomenal drill results on its onshore Ngamia-1 well with partner Tullow Oil plc (trades on Ghana, Irish and London stock exchanges). In late May the well has intersected oil and gas shows over a gross interval of 140 meters from 1,800 to 1,940 meters with drilling schedule to go to
2,700 meters.

Back of the envelope calculations estimate this well to prove up over 250 million barrels
of recoverable resources within the zones intersected with the potential to increase this figure at
greater depths. African Oil holds operated and non-operated blocks in the East African countries of
Kenya, Ethiopia, Somalia and Mali where only limited well and seismic data is available but based on the
Ngamia well all of the blocks are prospective. In Somalia, African Oil with operator Horn Petroleum
Corporation (HRN-TSX-V) and Australian partners Range Resources and Red Emperor will be testing their
Puntland Shabeel well where a 12 to 20 meter zone of significant hydrocarbon pay was intersected in
addition to more net pay sands with oil and gas shows. AOI surged to plus $11 dollars in May but backed off to around $9.70 in early June up from $1.50 in 2011 and $2.50 in May of this year. HRN trades at $1.25 up from 0.90 cents in February.

From East Africa we move to the other side of the globe to the land of Kiwis where New Zealand is
seeing a revival in oil exploration thanks to New Zealand Energy Corp. (NZ-TSX-V) and partner Tag Oil
Ltd. (TAO-TSX-V). The joint venture has two recently drilled wells in production on its Eltham permit,
Copper Moki-1 and Moke-2 and currently testing Copper Moki-3 and Moki-4. A commitment has been
made to drill up to eight wells in the second half of 2012. The companies have been granted an
extension of land to its Eltham permit (PEP 51150) in the prospective Taranaki basin of New Zealand's
North Island. NZ trades around $2.10 and has been both lower and higher in recent weeks but up from
$1.30 in January. TAO trades around $8.75 up from $5.00 in November 2011 but down from $11.00 in
April.

Coming home to northwestern Ontario I have to mention Gold Canyon Resources (GCU-TSX-V) and
their Springpole project east of Red Lake that continues to garner very respectable gold-bearing
intersections utilizing four barge positioned drill rigs. The latest hole to be reported SP12-128
intersected 319 meters at 1.02 grams per tonne gold (1,046 feet at 0.03 ounces per ton gold). This hole
is situated on the same 50 meter section and is a 75 meter step-back from previously announced drill
hole SP12-122 that intersected 330 meters at 1.58 grams per tonne. This drilling continues to expand
the Portage zone to the southeast and validates the continuity of the mineralized body with indications



of a very sizeable deposit. A recent 43-101 resource report gave 30 million tonnes at 1.26 g/t Au and
five g/t Ag in the indicated category and 60 million tonnes at 1.27 g/t Au and six g/t Ag in the inferred
category. The company added some corporate muscle to the board in naming Troy J Fierra, formerly of
Coeur d'Alene Mines and Richard J Hall of IAM Gold as directors. Gold Canyon stock came from highs of plus 3 dollar highs in 2011 and is holding well at $1.50 in early June.