Memorandum Agenda Item 11e 05/15/2000

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Land mine Page 12 of 20 selling the stock, even with the Bank of America's name attached to the project. An issue fell through in November 1986, as did plans to sell or merge Galactic with a larger company the following month. • Friedland continued to raise money by selling stock based on other Galactic mining projects stretching from the Yukon and South Carolina to the Philippines and China. "You could always raise money for new projects, not for old ones,"said Wyman, the Galactic executive. Sitting in a room in Tucson, where he was deposed by federal attorneys, Wyman added, "Pie in the sky is much more saleable than this table is." An organizational chart submitted to the U.S. Securities and Exchange Commission in 1988 showed Galactic with 16 corporate subsidiaries. Some of the projects, including ones in Nevada and South Carolina, saw actual mining. Others, such as one in Bodie, Calif., never got off the ground. Mostly the new projects called for more money, Wyman said. "The more deals he made, the greater his need for cash,"Wyman said. Friedland said all of the projects were intended to turn a profit, not just raise more money for Summitville. A project in the Philippines never produced gold for Galactic, but it was sold to another company for more than $30 million. The money from the Philippines was quickly consumed by Summitville, Friedland said. • Eventually, Friedland secured a loan from a Connecticut metals firm to repay most of the Bank of America loan. Bank officers were much relieved to be out from under such a risky loan. But others were still holding the bag, including Colorado residents, who had the Alamosa River at stake. State mining division cut off By the late 1980s, Colorado officials were becoming alarmed. State mining and clean water officials increasingly worried about chemicals the mine was releasing into Wightman Fork, the creek that feeds into the Alamosa River 41/2 miles below Summitville. Shortly after leaks in the liners were detected, Friedland appeared before the state's Mined Land Reclamation Board, which had the power to halt the project. "The Summitville heap-leach facility is something that I've been working on now for five years," Friedland said in a somewhat emotional speech. "It's been the focus of my life." According to a transcript, Friedland vowed to add multiple backup systems to prevent cyanide leaks, like the fail-safe systems in spacecraft. • He conceded he didn't know exactly how the system would work, but he added, "We are now determined to engineer and construct such a backup system." http://www.denver-rmn.cominews/0507smmtl.shtml 5/7/00