Hi Silvia:

Thank you very much for your 12/22/2007 article in the Ecuador Mining News outlining the details of the working mechanism of the proposed 70% windfall tax. Once again excellent summary.

Based on the details in your report, one of the members of our Internet investment chat line community did a great review of the 70% windfall tax and he raised many alarming concerns. Here is the link of the gentleman's original article.

In essence, the concerns are:

1. This tax is likely an administrative nightmare.

2. There is potential huge inequity amongst companies that qualify to pay such taxes due to the timing of the contracts with the government, which violated the underline premise that any taxation, on the whole, are supposed to be fair and equal.

3. It could lead to the abandonment of lower grade mining projects, which would contradict the government's wish to promote mining as a means to boost the economy. .

4. The handling of discovery of new resources on an operating property with a "contract" vs on a different concession.

These are the many questions that the government would have to face if this windfall tax, albeit unfortunately, becomes a reality. Consider the objective of any new tax is to boost the government's revenue stream, there are much simpler alternatives under the existing taxation structure to accomplish that. Without the introduction of new taxes, higher income taxes and royalties would have accomplished the same. And this can be achieved without resorting to a new gimmicky tax that is both unfair to apply, difficult to administer, impedes the development of the very industry the government tries to promote, and most damagingly, seen as an investor unfriendly cash grab by the investment public. Currently, Mongolia is the only country in the world that has implemented a windfall tax on mining and the results are, by all account, disastrous.

It is our wish that you can review our concerns. When you discuss this tax with your media colleagues, or government officials, we also wish that these concerns could be conveyed to them in considering the pros and cons of such implementing such a tax.