Explorer II Resource Limited Partnership (the "Fund" or "Explorer II") raised $27.2 million in December 2004 that was invested in both flow-through and non-flow-through common shares of 29 Canadian resource companies. The portfolio assets were 77% invested in TSX listed stocks and 86% in companies with a market capitalization greater than $50 million. Based on the initial investments, the portfolio assets were 95% invested in companies whose principal operations were comprised of oil and gas exploration, production and development. The Fund's initial portfolio parameters substantially exceeded the minimum investment criteria required by the Fund's prospectus.

At June 30, 2006 the Fund's net asset value was $28.09 per unit, representing a total after-tax return on money-at-risk of 49% for an Ontario investor taxed at the highest marginal tax rate.