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„- <br />Tom Gillis <br />Page 2 <br />December 5, 1997 <br />Company is not the responsible party for insuring the financial wan•anty on the C-JD5 Mine <br />as a result of an agreement between Joe Baldwin and Dorothy Blake of Blake Mining <br />Company. A Settlement Agreement and Mutual Release was entered into between <br />Gorothy Blake and Mr. and Mrs. Joe Baldwin on or about November 23, 1996. In this <br />Agreement, Dorothy Blake conveyed to the Baldwins C-JD5, C-SR13 and C-SR15 Mines <br />in consideration for a release of a judgment obtained by the Baldwins against Blake Mining <br />Company. In conjunction with that Settlement Agreement, the Baldwins agreed to <br />complete the assignment of all of the mining leases and to satisfy all requirements of the <br />Ueparment of Energy. Mrs. Blake agreed to allow the Performance Bonds to remain with <br />the Department of Energy until the mines were leased, sold, assigned, placed in <br />production or upon submission of an exploration plan or mining plan. The Baldwins <br />agreed to comply with these requirements and to ensure that the Performance Bonds were <br />released to Blake Mining Co. The Baldwins agreed to hold Mrs. Blake harmless and would <br />indemnify Mrs. Blake for any claims, costs or expenses which arise from the mining leases. <br />This Agreement is attached to this letter for your information. <br />After the Settlement Agreement was executed, Mr. Baldwin entered into an <br />agreement with Telluride Mining Company to lease the mines. Attached to this letter are <br />the Assignments from Blake Mining Company to Telluride Mining Company of the mining <br />leases. As a result of the Settlement Agreement and Assignments, Blake Mining Company <br />is not responsible for the Performance Bonds with the Department of Energy or the <br />financial warranty. If Telluride Mining Company does not replace Blake Mining Company's <br />bonds and comply with all of the requirements necessary for the assignment of the leases, <br />the Baldwins and Telluride Mining Company are liable to Blake Mining Company. To <br />resolve any potential issues as a result of any default of Telluride Mining Company, Blake <br />Mining Company requests a continuance of the hearing of this issue until the February <br />1998 board meeting. <br />As stated above, Blake Mining Company respectfully requests a continuance of the <br />hearing before the board until February 1998. By the February 1998 meeting, everyone <br />should have a better understanding as to how these issues will be resolved. <br />Thank you for your consideration in this matter. If you have any questions, please <br />call me. <br />Very truly yours, <br />BRAN EY, HILLYARD AND BARNHART, L.L.P. <br />~. <br />Angela L. kker <br />