Top End Rebuild?

[Lifter]

Hello Again Everyone!

I tried to troubleshoot by bike problem with no results...

I brought it into my local bike garage and got the following diagnosis and was looking for help with the next step.

PROBLEM:
After the bike has run for a couple of minutes, it begins to stumble and studders. This happens a couple of times before it eventually stalls.

SELF TROUBLESHOT (Work verified by garage tech)
- Adjusted Valve Gaps
- Checked Petcock
- Trouble Shoot Voltage Regulator
- Cleaned Carb

GARAGE DIAGNOSIS:
- Vales are both leaking a bit (Leak down is 10%)
- Can hear air leaking escaping from intake and exhaust
- Compression 140PSI (GOOD)
- EXHAUST IS DRILLED - Suspect this may have burned valves (see attached pic)
------------------------------
- Should do top end, Valves and Rings

NEXT STEPS?

I was hoping to get two questions answered:

1. Does this sound like a reasonable cause
2. Does this sound like the correct fix?
3. Any details on parts: What do i need to buy? Any article to
follow?

Thanks in advance again!!!!!