Memorandum Agenda Item 11e 05/15/2000

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Landmine Page 8 of 20 Leonard, a metallurgist by training. Leonard said the other Summitville workers were appalled as they watched Roper tear apart the numbers they had carefully put together. • "And finally Ed made it pretty clear that if you didn't get with the program, that you needn't be here—in other words, you didn't need to be employed by Galactic," Leonard said. According to Leonard, Roper said the idea was to get Bank of America into the project. Once in, the bank wouldn't be able to cut off funding, Roper believed. Leonard recalled Roper's saying: "It's just like getting someone pregnant— there is no half-pregnant." Roper said in a deposition that he couldn't recall the Del Norte meeting. Roper also said he doesn't recall using the phrase about pregnancy and wasn't trying to trick the Bank of America into investing in the project.And he pointed out that the business plan passed inspection by Bechtel before being submitted to the Bank of America. Roper testified under a federal grant of immunity from criminal prosecution, admitting during the deposition that his legal fees were being paid by Friedland. The loan came through in the summer of 1985. But to begin making payments on it in 1986, Galactic had to start squeezing out gold by the following spring. That meant rushing to build the mine in the dead of winter. At 11,800 feet in 4110 the Colorado Rockies, the decision proved disastrous. Winter brings avalanche of risk As fall crept toward winter, the mine was nowhere near ready. An interoffice memo in November 1985 estimated that the area in which the ore would be treated with cyanide—called the heap-leach pad—was only 18 percent complete, and the cost was overbudget by 121 percent. Leonard, the mine manager, warned Roper that working through the winter in the high country would be difficult. In fact,just keeping the dirt road to the mine plowed would be a struggle. Back in Vancouver, Galactic executives weren't convinced. Friedland said he knew winter construction would be expensive. But, he added, reputable companies believed it could be done. "With the benefit of hindsight, I have learned that I wouldn't even build my home in the wintertime," Friedland later said in a deposition. Galactic's Canadian engineering consultant, Klohn Leonoff, went along with working in winter, as did Bechtel and the Bank of America, Friedland pointed out. http://www.denver-rnm.com/news/0507snuntl.shtml 5/7/00