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Mr. Jim Stevens 3 At a meeting held that same day in the Denver law office of Mr. Rodney Knutson, Mrs. Fraser and her attorney, Mr. James S. Munn, informed Mr. Knutson and myself that they would shortly begin processing ore from this Colorado Springs property. At that meeting Mr. Knutson and I informed Mrs. Fraser and her attorney that the mill was not permitted by Boulder County and the Mined Land Reclamation Division to process any ores other than those from properties associated with the Gold Hill Ventures' permit. These concerns about the permit have been repeatedly expressed by my attorneys and myself over the course of the last four years. Mr. James S. Munn refers to these concerns on page 3 of his letter of October 25, 1990, to Mr. Knutson which I have attached to this response letter. Please note that Mrs. Fraser's attorney makes reference to the issue of permits as a matter of Mr. Knutson having "again raised perceived obstacle considerations previously expressed in your correspondence to us. Among other things, you addressed current permitting, water availability and access to the tailings pond." I wish to emphasize that my attorneys and I have never considered that operating the mill under the existing county and state permits was an obstacle. We view these permits as an absolute necessity to conducting a legal and proper operation of the Gold Hill Mill. During November and December, 1990, Mr. John R. Henderson of the Boulder law firm of Vranish and Raisch and I engaged in lengthy negotiations with Mrs. Fraser, Wayne Tatman, and Mr. Swede Johnson of the Boulder law firm of Chrisman Bynum & Johnson. During these negotiations, Mr. Henderson and I repeatedly stressed the necessity for the mill to be operated in conformance with both the Boulder County and Colorado Mined Land Reclamation Division regulations. A copy of the Milling Contract between Colina Oro Molina, Inc. and Mi Vida Enterprises, Inc. dated February 13, 1991, is attached to this response letter. You will find under Section 14. Compliance With Governmental Permits. ~orovals and Regu]ations that it was agreed that "Each party shall bear sole responsibility for complying with all governmental permits, approvals and regulations governing its operations or business." In late October, 1991, I was informed by Mr. Tatman, COM, Inc.'s on-site Mill Superintendent, that Boulder County Zoning Department approval to process other outside ores belonging to COM, Inc. had been obtained. Mr. Tatman has informed several other people that the required Boulder County consent to process imported ores has been properly obtained.