Update To Shareholders

1-26-2009 

From the desk of Russell Twiford, Vice President and CEO.

The objective of this letter is to provide an update to our shareholders regarding the activity and progress during 2008 at our Coolidge, Arizona operation. 

Regardless of our inability to obtain new funding we are continuing limited production in an effort to get higher recovery in gold values.  Lab tests are primarily finished and will be in a week or two and we will put the best recovery method in effect using our 20 gallon tank procedures as usual.  Results from the lab work looks promising, perhaps as high as 4.4 ounces (136.8 grams) from 1000 gallon, extrapolated up of course from our 20 gallon runs, but not a certainty until purity from the final product has been established which if our numbers prove to be accurate, would be a welcome relief from the previous high of 34.2 grams per 1000 gallon.  Provided our production runs equal our lab work, or close to it, then that should be enough to interest a major mining company, whose reserves mostly run in the 3 to 5 grams per ton of ore.

However, the current lack of a speculative equity market and the massive de-leveraging and liquidation by investors has created a market that is a challenge to operate in.  We believe that this lack of liquidity will have beneficial results for projects that have a known source and could come to maximum production in the next year or two as new discovery’s, the precious metals primary need, appears to have been delayed.  For the next 5 to 10 years and beyond, ordinary mine reserve depletion, for most of the precious metals, and a lot of the base metals, will likely exceed discovery and reserve replacement by a very large amount.  We do not have to worry to much about the above as we have our reserves in aquifer waters in huge amounts and when we are done with our precious metal recovery the water goes back into the aquifer as pure or purer as when it came out. 

Management is considering all options available to ensure that the project continues to progress.  These include possibly exploring additional equity funding, joint venture, strategic partner and metal trading companies willing to fund projects for a commitment of product.

We realize 2009 will likely be a challenging year.  We thank all of our stockholders for their continued support and wish you all a Happy and Rewarding New Year.  We look forward to getting a year closer to maximum production from our aquifer.  Although it is, indeed, a long road, the reward appears increasingly attractive.

This communication to shareholders and the public contain certain forward looking statements. Actual results may vary materially from those indicated by such statements. All statements, other than statements of historical fact, included herein, including, without limitation, statements regarding estimated reserves, estimated future production, and the value thereof, are forward looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.