Tirad Minerals, Inc.

April 27, 1983 Tirad Minerals, Inc. 10th Flr.,Ramon Magsaysay Center Roxas Boulevard, Manila Gentlemen: This refers to your letter, dated April 12, 1983, requesting the comment of this Commission on the queries posed therein. cdtech It appears therein that title and mining rights to certain mining claims, which have already been quite extensively explored and found to be interesting and promising, are being offered to you. The claim owner is willing to give you those mining claims in exchange for so much of your shares of stock at par value. You now pose the following queries quoted hereunder: "1. Whether it is legally feasible for us to use our unissued shares to acquire the mining property; 2. If it is legally feasible for us to so acquire the mining property with our shares but our unissued shares are not enough for that purpose, whether we can increase our authorized capital stock using the present and reasonable value of the mining property as the paid in on the increase, and 3. If it were so legally feasible for us to do, what acceptable steps should we take in arriving at the fair and reasonable amount of share we should pay for the mining property." Anent thereto, the pertinent provision of P.D. No. 463, "providing for a modernized system of administration and disposition of mineral lands and to promote and encourage the development and exploitation thereof", as amended by P.D. No. 1385, provides, thus: "SECTION 94. Mine Evaluation . The appraisal or reappraisal, evaluation or re-evaluation of any mine, mining claim or claims with improvements thereon whether patented, leased or otherwise, for the purpose of raising capital for the formation or organization of a partnership or corporation or for determining the present net value of the mines shall be made by the Director or his duly authorized representative. No mine, mining claim or claims without improvement thereon, whether patented, leased or otherwise, shall be accepted as asset or basis of any asset in the formation or organization of a partnership or corporation without the value thereof having been first appraised or determined by the Director as herein provided." It is therefore, legally feasible for you to use your unissued shares to acquire the mining property, provided, however, that the mine, mining claim or claims have been appraised or determined by the Director of the Bureau of Mines & Geo-Sciences or his duly authorized representative. The present net value of the mining property must be confirmed directly to this Commission by the Bureau of Mines & Geo-Sciences. Inasmuch as your unissued shares are not enough to pay for the value of the mining property, you may proceed with the increase of your authorized capital stock pursuant to Section 38 of the Corporation Code of the Philippines. Furthermore, where mine, mining claim or claims are made basis for the infusion of fresh capital, in addition to the preceding paragraph, the following documents must be submitted to this Commission: a) Copies of the lease contract on the mining claims issued by the Bureau of Mines & Geo-Sciences in favor of the claimant; b) Deed of assignment, executed by the claimant in favor of the corporation, in consideration of the shares of stock of the latter. We trust that the foregoing sufficiently answers your queries. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman