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generally to the value of domestic oil and gas properties. The complete text of Mr. Wanner's opinion is set forth as Appendix A hereto and should be read in its entirety. Mr. Wanner is a registered professional engineer and received his degree as a Petroleum Engineer from the Colorado School of Mines in 1948. From 1959 to the present Mr. Wanner has been an independent consulting petroleum engineer in Denver. Colorado. • In 1984 and 1985, Mr. 1Vanner provided reserve estimates to the Company and in 1986 reviewed the ~' Company's reserve estimates regarding the oil and gas assets to be sold. He has also evaluated new wells and reserves for the Company. The Company has paid Mr. Wanner 528,322 for all services provided since 5 January 1985. In addition, for Mr. Wanner's services in connection with the proposed sale of assets, the Company has agreed to pay Mr. Wanner a fee of approximately $1,000. The Company has agreed to indemnify Mr. Wanner against certain potential liabilities, including liabilities under the federal securities laws arising out of his engagement by the Company. E. Vote Required; No Appraisal Rights The affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Company is required to approve the Purchase Agreement and the sale of the Company's oil and gas properties. Stockholders of the Company are not entitled to appraisal rights in connection with the proposed sale of the Company's oil and gas properties. F. Use of Proceeds The proceeds from the sa6; of the Company's oil and gas properties will be used to (I) to retire the outstanding loan on the Company's line of credit with the United Bank of Denver, and (2) for working capital to partially finance the Company's gold activities. As of the date of this Proxy Statement, $1,825,000 was outstanding under the line of credit. The credit facility bears interest at'/a of one percent over the bank's prime rate. The existing Cacility with United Bank of Denver has been structured to the Company's oil and gas operations and borrowings under the line of credit are secured by the Company's oil and gas properties. The existing facility will terminate ors completion of the sale of oil and gas properties. The Company has entered into discussions with the United Bank of Denver and other financial institutions to structure a new credit facility to accommodate its new line of business. G. Narrative Description of the Cold Business As a result of the sale of the <:ompany's oil and gas properties, the Company no longer will be engaged in the oil and gas business and will bt: engaged primarily in the gold business. Following is a general discussion of the gold industry and certain of the Cactors that will affect the Company's gold business. L Factors hlflueneUtg [he Ga(d lnduslr}• The price of gold, like most commodities, has fallen from the peak level in the early 1980's but in contrast has maintained a base that allows for attractive economic returns. Production of gold is dominated by the South Africans whose deep mines produce around 60 percent of free-world production. The Middle East producers who dominate world oil production are the low cost producers (forging :t strategy involving lower pricee. to eliminate marginal producers). South Africa is one of the highest cost producers (with costs escalating). Most of the gold that is produced today goes into the manufacture of jewelry. However, because of gold's superior electrical qualities and resistance to corrosion and other desirable combinations of physical and chemical properties, gold has emerged in the late 20th century as an essential industrial metal. Gold performs critical functions in computers, communications equipment, jet engines and a host of other products. Gold also has a unique status among all commodities as a long term store of value. Gold was long considered essentially a monetary metal and most of the bullion produced each year went into vaults of