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mine. At the time of this transaction, CCI was owned by several stockholders. Following execution of this agreement, the Company proceeded to negotiate additional agreements with CCI related to the Colosseum Mine. After completion of these agreements, Dallhold acquired 100 percent of the stock of CCI from CCI's investors. At about the same [it[te as the Company negotiated its option with CCI. Elders Finance negotiated the purchase of a 20 percent interest in the Colosseum Mine. CCI, Dallhold and Elders Finance all are not related in any way to the Company or its affiliates. Following its purchase of CCI, Dallhold indicated to the Company and others that it intended to control 100 percent of the Colosseum Mine notwithstanding any of CCI's agreements with the Company, Elders Finance or others. In the face of these statements, the Company advised Dallhold that it intended to protect its contractual rights to purchase its joint venture interests in the Colosseum Mine and that it would take legal action if necessary to enforce such contractual rights. Negotiations between the Company and Dallhold occurred, and as a result the Company agreed to reduce its potential interest in the Colosseum Mine from 50 percent to 25 percent and the Company obtained the option to sell its interest to CCI. Dallhold also reached an agreement with Elders Finance to acquire their interest. Following extensive review of the Colosseum Mine in December 1986 and January 1987 and attempts to secure financing for the Company's promissory note on the Colosseum Mine, the Board of Directors of the Company concluded that the sale of its interest in the mine to CCI was in [he best interest of the Company and that the proceeds from the sale could be invested in other gold properties nffering potentially greater returns [o the Company. The Company believes that the basic business rationale from Dallhold's standpoint, as sole stockholder of CCI, was to acquire as large an interest as possible in tl[e Colosseum Mine. Given the prior agreements between CCl and the Company and CCI and Elders Finar[ce, Dallhold paid a premium to the Company and Elders Finance to attain its business objective. RG 1 owns a 19 percent interest in a joint venture that leased the Cainp Bird Mine in August 1986 with an option to purchase the mine exercisable December 15, 1988. RGI's primary venture partner is Chipeta Mining Corporation, a wholly owned subsidiary of Western Mining Corporation, Melbourne, Victoria, Australia. The Camp Bird Mine, which first produced gold in the 1890's, has produced almost 1.5 million ounces of gold since its discovery. The mine is considered exploratory because less than half the known mineral vein has been explored. Given its exploratory purpose, the mite currently is not producing sufficient revenues to pay mining costs. Further exploratory work is underway [o increase the number of exploratory targets, and thejoint venture's funds during the option period will be devoted to these activities. If at the end of the option period the joint venture determines that the Camp Bird Mine cannot provide a suitable return to the venture, tl[e joint venture is not obligated [o purchase the mine. The option may be extended For an additional year (or $50,000 per month. The Company paid approximately $140,000 of the cost of the lease and option and is obligated to pay 20 percent of the costs of the mine. RGI has spent approximately $345,000 on this property through December 31.1986. The mine plan projects RG 1 will spend an additional $175,000 net of operating revenues on the mine through the end of calendar year ] 987.On or before December I5, 1988, the venturers can purchase the mine for approximately $2.4 million, of which the Company's share would be approximately $480,000. The purchase price includes $150,000 in cash and payment of approximately $875,000 in outstanding loans secured by the property. The balance of $1,346,000 would be in the form of three promissory notes, each bearing interest at the prime rate and payable to the seller in the amounts of 5450,000 due December I5. 1989, $450,000 due December I5, 1990 and $446,000 due December 15, 1991. The lessor of the Camp Bird Mine is a third party delendant to an environmental lawsuit under the Comprehensive Environmental Response Compensation and Liability Act seeking substantial damages. Although the Company believes it has no direct liability in this matter, the lawsuit may limit the ability of the venture toexercise its option :tt the end of the option period. 10