Far Southeast Gold Resources, Inc.

March 1, 1990 Far Southeast Gold Resources, Inc. c/o Atty. Ray C. Espinosa 105 Paseo de Roxas 1200 Makati, Metro Manila S i r : This refers to your letter dated February 20, 1990, requesting confirmation that FSEGRI's 533,334 Class "B" Common Stocks have been validly issued despite the clerical omission on Article SEVENTH of the aforenamed company's Articles of Incorporation. prcd It appears on record that FSEGRI's Articles of Incorporation was approved by the Commission on February 2, 1989, with the following restrictive provisions on the issuance of Class B Shares in paragraph b of Article VII reading: (b) Shares of Class "B" Common Stock shall be issued subject to the following limitations which shall be printed in the stock certificates for such shares. The total number of shares of Class "B" Common Stock which shall at anytime be subscribed, issued or outstanding shall in no case exceed four-sixth (4/6) of the number of shares of Class "A" Common Stock then subscribed, issued or outstanding or 40% of the aggregate number of Class "A" outstanding. Any issuance of or subscription to any shares of Class "B" Common Stock in violation of this condition shall be deemed null and void. If at any time the total number of Class "B" Common Stock subscribed, issued or outstanding exceeds the limits prescribed in the preceding paragraph, then the corporation may, at its option, issue or sell such number of Class "A" Common Stock to Philippine nationals, at the price and in the manner provided in paragraph (b) hereof, or take such other action as may be necessary to insure that, after such issue or such other action; the total number of subscribed issued or outstanding Class "B" Common Stock will not exceed 40% of the aggregate number of Class "A" and Class "B" Common Stock then subscribed, issued or outstanding . On December 6, 1989, the Commission approved FSEGRI's application for increase of its authorized capital stock from P1,000,000.00 divided into 6,000 Class "A" Common Stock and 4,000 Class "B" Common Stock, each with a par value of P100.00 to P133,333,500.00 divided into 800,001 Class "A" Common Stock and 533,334 Class "B" Common Stock, with a par value of P100.00 per share. Both in the original issue of shares and increase in capital, Class "B" shares have been fully subscribed and paid-up. On January 11, 1989, FSEGRI filed an Amended Articles of Incorporation purporting to correct the clerical omission in Article VII, paragraph (b) by adding the phrase "and Class "B" Common Stock between Class "A" and "outstanding" thereof, among others, which was approved by the Commission on the same date. The real intent of the Corporation is to issue 4/6 or 40% of the total outstanding shares since its incorporation as can be gleaned from the restrictive provision itself to the effect that "the total number of subscribed, issued or outstanding Class "B" Common Stock will not exceed 40% of the aggregate number of Class "A" and Class "B" Common Stock then subscribed, issued or outstanding ". This is further substantiated by the fact that the originally issued and outstanding 4,000 Class "B" Common Stock comprise 40% of the authorized capital stock and not merely 4/6 of the aggregate number of Class "A" outstanding. Similarly, the same percentage is maintained in the recently approved increase of capital stock of the subject corporation. By analogy, the Rule on Statutory Construction and Interpretation is applicable in the instant case. The well-entrenched rule provides thus: "Generally, mere verbal inaccuracies, or clerical errors or misprints will be corrected, in the construction of a statute, whenever necessary to carry out the intention of the legislature as gathered from the entire act. Accordingly, the court may disregard or rectify errors or mistakes in statutes in the use of words, numbers, grammar, punctuation or spelling in order to give effect to the intent of the legislature. In other words if the legislative intent is clear, it must be given effect regardless of inaccuracies of language." (Samson S. Alcantara, Statutes, (citing 82 CJS, Sec. 342, pp. 685-687; Rufino Lopez & Sons Inc. vs. Court of Tax Appeals, 53 O.G. 3065) pp. 4041) prcd In the light of the foregoing consideration, the Commission hereby confirms that the 533,334 shares of FSEGRI were validly issued. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman