United Paragon Mining Corporation Reduction in Listed Shares

January 28, 2000 PSE CIRCULAR FOR BROKERS NO. 212-00 SUBJECT : United Paragon Mining Corporation Reduction in Listed Shares In connection with the reduction in the number of listed shares of UNITED PARAGON MINING CORPORATION (the "Company" or "UPM"), which was approved by the Board of Directors of the Company on June 1, 1999 (disclosed on June 2, 1999 via Circular No. 1284-99), approved by the Stockholders of the Company on July 30, 1999 (disclosed on August 2, 1999 via Circular No. 1916-99) and approved by the Securities and Exchange Commission on November 26, 1999 (disclosed on December 9, 1999 via Circular No. 3137-99), please be informed that the Exchange approved the said reduction in the number of listed shares on January 26, 2000. LibLex The number of listed shares shall be reduced by 879,852,018 common shares , with a par value of P1.00 per share , which consist of the following: a. 12,333,600 common shares representing the unsubscribed portion of the ESOP shares which were listed but had expired in 1994; b. 63,075 common shares representing the unsubscribed portion of the 1994 1:1 Stock Rights Offering which were listed previously; c. 867,455,287 common shares covering the fifty percent (50%) reduction in outstanding capital stock; and d. 56 common shares representing fractional shares which resulted from the 50% reduction. After the said reduction, the total number of listed shares shall be equivalent to 867,455,231 common shares. The decrease of the Company's outstanding capital stock by fifty percent (50%) is being undertaken to reduce the deficit of the Company. As per the resolution of the Company's Board of Directors, the effectivity date of the said reduction is on February 11, 2000. On January 31, 2000 the suspension of trading of the shares of the Company shall be lifted. From January 31, 2000 to February 4, 2000, trading and settlement shall be based on the unreduced number of shares. Notwithstanding the February 11, 2000 effectivity date, after taking into account the settlement period for shares trading on the Exchange, the shares of the Company shall be considered reduced on February 7, 2000. Consequently please take note that beginning February 7, 2000, the trading and the corresponding settlement of the said shares of the Company will be based on reduced shares. However, the PCD shall only adjust the brokers' portfolio to correspond to the reduced number of shares on February 11, 2000, the effectivity date. The following table illustrates the trading and settlement of the Company's shares on the enumerated dates: Trading Settlement January 31 (Monday) February 4 (Friday) LIFTING OF SUSPENSION Unreduced Number of Shares Unreduced Number of Shares February 1 (Tuesday) February 7 (Monday) Unreduced Number of Shares Unreduced Number of Shares February 2 (Wednesday) February 8 (Tuesday) Unreduced Number of Shares Unreduced Number of Shares February 3 (Thursday) February 9 (Wednesday) Unreduced Number of Shares Unreduced Number of Shares February 4 (Friday) February 10, (Thursday) Unreduced Number of Shares Unreduced Number of Shares February 7 (Monday) February 11 (Friday) EFFECTIVE DATE Reduced Number of Shares Reduced Number of Shares Below is the procedure for trading the old UPM stock certificates and their replacement with new stock certificates: On Effectivity Date The reduced number of 867,455,231 shares listed shall be reflected in the PSE trading system. After Effectivity Date On the trading day immediately following the Effectivity date, UPM shareholders shall have the option to: hold and trade their old stock certificates without need of prior replacement to new ones within thirty (30) calendar days immediately following the Effective Date. However, corresponding adjustments in the number of shares will be made to account for the said fifty percent (50%) capital reduction; or surrender their UPM stock certificates for replacement with new ones already reflecting the reduced number of shares. For this purpose, all UPM stockholders may surrender their old stock certificates to its stock transfer agent, Rizal Commercial Banking Corporation, with address at RCBC Building, 333 Gil Puyat Avenue, Makati City. After 30 days from Effectivity Date After the 30-day period from Effectivity date, the old stock certificates shall not be honored. These have to be surrendered to UPM's stock transfer agent to be cancelled and replaced with new ones. For your information and guidance. (SGD.) MARIA ISABEL T. GARCIA OIC, Listings and Disclosure Group