I'm trying to put current info together.

1) We have been told (hearsay) that the deal is done and we are waiting on Ven.

( I am assuming Fung has kept the body of the MOC the same and the only change to it would be the 1/3 2/3 ownership at the top of the page.)

2) Venezuela has announced many things some of them contradictory, but the 51/49 JV law or decree sounds like the new policy standard and this does not work with our MOC without major changes.

3) A buyout would circumvent a number of these issues, who gets the mills and other equipment?

4) One of the reasons being touted for a possible delay (before the "It is now up to Venezuela" - change of Fung outlook) is posts were made awhile ago about the possibility of a financial entity (a bank or exchange) that would be needed to be set-up within the KRY/CRRC JV (and/or) created for tax pourposes. I cannot remember who was posting this. BUT this might have been close to a real reason why nothing is happening?

IMO- The way this is shaping up. Chavez wants to exchange in a new banking system (China/Rus/Ven Bank) outside the Dollar denominated system, but under our current agreement we need to be paid in Dollars which costs a lot more than the current exchange rate in Ven. and Chavez does not want to deal in Dollars. I would take gold instad (but),

5) There has been no mention of the Venezuelan gold exchange price rate mentioned by anyone for a long while, is it still so lopsided in favor of the Vennies? (I assume that it is).

If I had to sum up what I have seen and feel, I would have to say we have been getting bled dry, our situation in Ven is probably not going to change. Had we filed for arbitration the property and all facilities would have been confiscated within 48 hours (like LB), there would not have been any negotiating to partner with CRRC after that. So the only threat we have that I can imagine is to get a solid backer for arbitration financing at the best price (not in the last minute) and announce publicly that the financing is in place we are ready to go if there is no progress or settlement made and at the same time release a plan for the cutting the Company expenditures if Arbitration is announced. Maybe Chavez will jump and confiscate or send Militia in early, then we file. I think at some point we need to play harder.

I am still hoping Fung can pull this all together somehow.

HB