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Ms. Gwen Fraser August 30, 1993 Page 2 asked your on-site mill superintendent what was the source of the ore in the coarse ore bin, and was told that "It was the last of the ore from the Bueno Mine." Records on file with the Mined Land Reclamation Division ("NERD"~ clearly show that the Bueno Mine ore was completely processed through the mill prior to the importation of Tom Hendricks' ore. Tom Hendricks has verified that he has not recently sold or shipped any ore that could possibly be characterized as "monzonite" during the last month. All of this information leads us to conclude that perhaps CON, Inc. has imported and processed ore at the Gold Hill Mill in recent weeks. Any such action would jeopardize the MLRD permit that Mi Vida Enterprises shares with your company as co-permittee. The Boulder County Land Use Department has previously informed you and your representatives that the processing of imported ores would be a direct violation of county zoning regulations. Prior approval of the Boulder County Land Use Department for the importation of off site ores is a requirement of the MLRD's agreement to allow the Gold Hill Mill to process ores from other mines. As you are aware, the MLRD made it very clear that CON, Inc. and its affiliates were not to bring off site ore to the mill until the MLRD staff received all of the information they required concerning the nature of the ore and approved the processing of off site ore. The technical revisions to the permit require that all off site ores be sampled and tested in a manner at least equal to that of the ore on which the current permit is based. All test results are supposed to be supplied to the MLRD prior to processing any off site ore through the mill. All ore processed in the Gold Hill Mill is supposed to be logged in at the mill, and the logs must state where the ore is from. CON, Inc. and its affiliates are remzired to certify that the scarce cf the ore processed in the mill is from a permitted site and to provide the MLRD with the permit number before importing any off site ore. If CON, Inc. complied with all of these permit requirements, Mi Vida Enterprises has not been informed of your Company's efforts to conduct milling operations allowed by the existing permits. However, if CON, Inc. or its affiliates and employees. have not complied with these MLRD requirements for importing off site ore to the Gold Hill Mill, then you have placed Mi Vida Enterprises at great financial and legal risk. The millions of dollars of investment and the years of labor by the Steen family, Cosmos Resources is imperiled by Com, Inc.'s importation of any ore that does not strictly follow the MLRD guidelines. Your own investment is also in jeopardy.