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' COLD fOTl. PROJECT SUMA/ARY ~ CONCLUSIONS PAGE I <br />1 <br /> Since We proposed program requires S 7S million the source of <br /> additional funds, over and above the S 5 million "earn-in" capital <br />' would have to be either on a pro-rata basis, from borrowing, or <br /> dilution of other parties interest. The S 5 million commitment is <br />' proposed only after the preliminary 5250,000 program. The required <br />' second stage commitment of 54.75 million is sufficient to drive the <br /> 7,375' elevation adit and acqutre the mill from the Frasers. . <br /> <br />. <br />~ The required funding at this stage, then, is 5250,000 with a commit- <br />' ment to fund an additional 54.75 million on completion of a success- <br />• ful preliminary program, subject to finalizing agreements with the <br />.~ existing joint venture partners. <br /> Negotiations with the Steens, and their respective joint venture <br />' partners, to secure a position in the project that allows for an accept- <br /> able risk-rewazd to the new investor has yet to be completed. How- <br />i ever, preliminary discussions have shown that management of the <br />' project is available to the right investor with representation on a <br /> management committee by the Steen family. In addition, preferential <br /> eazly distribution of profits to the new investor has been discussed <br /> with a favourable reaction from the Steens. This could substantially <br /> enhance the NPV of the project for the new investor. When the <br /> ability to fund the program can be demonstrated every effort will be <br /> made to formalize an agreement on all 117 claims on the basis of an <br /> initial 5250,000 investment in the "preliminary program" outlined in <br /> sections 7 and 8 of this report. The Frasers wish to sell the mill for <br />~ S1 million may prevent unanimous joint venture partner agreement <br />' and an initial investment of 51.25 million could be required to secure <br /> an agreement. <br />With a property of this nature, a contiguotts block of historically high <br />~ yielding gold claims, integrated by the Steen family and virtually unto- <br />~ ached since the 1920's, and only then by small shallow workings, it is <br />r difficult to realistically quantify the upside. No attempt to introduce <br />~ "blue sk}r' into the project has been attempted in this report. <br />1 ' <br /> <br />R W Turner P.Eng. <br />CGJUUlting Mining Engineer <br />' December 1989 <br />' R. W. Turner C.Eng. <br />COnSUlling Mining Engineer <br />