Reduction in Authorized Capital Stock

February 8, 2000 PSE CIRCULAR FOR BROKERS NO. 290-00 February 7, 2000 Disclosure Department Listings and Disclosure Group The Philippine Stock Exchange 4/F Philippine Stock Exchange Center PSE Center, Exchange Road Ortigas Center, Pasig City Fax No. 634-2051 Attention : Ms. Mabel Trinidad Garcia and Ms. Luisa W. Buenaventura RE : Reduction in Authorized Capital Stock Gentlemen: In connection with the above-referenced matter, we furnish herewith for your information a copy of the "NOTICE TO THE STOCKHOLDERS OF UNITED PARAGON MINING CORPORATION" which appeared in the February 3, 2000 issue of the Malaya newspaper. prcd Thank you. Very truly yours, (SGD.) DELFIN P. ANGCAO Asst. Corporate Secretary NOTICE TO THE STOCKHOLDERS OF UNITED PARAGON MINING CORPORATION Dear Stockholders: Please be informed that the Securities and Exchange Commission has approved the decrease of the authorized capital stock and the amendment of the Articles of Incorporation of United Paragon Mining Corporation ("UPMC" or "Company") under which, UPMC's Issued and outstanding capital stock was decreased by fifty percent (50%) in order to reduce the Company's deficit and its authorized capital stock correspondingly decreased from P3,027,000,000.00 to P1,903,500,000.00. Said decrease of UPMC's authorized and outstanding capital stock and the corresponding amendment to its Articles of Incorporation were approved by the requisite majority vote of stockholders holding at least two-thirds (2/3) of the outstanding capital stock at their meeting on July 30, 1999. cdlex As a consequence of such capital decrease, every two (2) shares of stock held by you in UPMC shall be reduced by fifty percent (50%), or to one (1) share of stock at the same par value per share. Stock certificates covering your present shareholdings in preferred A and B shares which are not listed and traded on the Philippine Stock Exchange (PSE) will, upon surrender to UPMC's stock transfer agent, the Rizal Commercial Banking Corporation at its address at RCBC Building, 333 Gil Puyat Avenue, Makati City, be cancelled and replaced by a new stock certificate reflecting the reduced number of shares. With respect to the Company's existing common shares which are listed and traded on the PSE, the same may be transacted on the PSE until March 10, 2000 without need of prior replacement of the old stock certificates covering them by new ones. However, starting February 7, 2000, corresponding adjustments in the number of the shares traded will be made to account for the said fifty percent (50%) capital reduction. After March 10, 2000, common shares covered by old stock certificates shall not be allowed to be transacted on the PSE unless said old stock certificates are first surrendered to UPMC's transfer agent for cancellation and replacement with new ones. Any stockholders may, however, request for the immediate replacement of his old stock certificates with new ones to reflect the reduced number of shares. No stock certificate will be issued for any fractional share resulting from the reduction but will instead be paid in cash by the Company at the current market value. Any queries on the foregoing matter may be directed to RCBC, Transfer Agent, at its address mentioned above or at telephone number (632) 894-90-00, or to UPMC, Attention: Ms. Gloria Gerona, at the 8th Floor, Quad Alpha Centrum Building, 125 Pioneer Street, Mandaluyong City or at telephone number (632) 636-5133. Mandaluyong City, January 28, 2000 (SGD.) ROBERTO V. SAN JOSE Corporate Secretary