As I see it, there are three alternatives facing investors in our company, each of which has its pros and cons, depending on your investment horizon and expected return.

1. Sell to a Major.

Well, we're in the midst of this already, and it's fairly obvious what the reaction is, at least amongst minority shareholders. We don't know as yet what the majority view is, but taking everything into account - the size of the deposit, the political environment, the potential for rival bids, and not least, the specific timing of this offer - I would guess that the larger holders remain uncertain. Clearly some have already left to be replaced by holders with a lower entry cost. Would these holders support this low offer, or would they wait in the expectation of an improved bid? Also, given their lower cost and recent arrival, would it not be to their advantage to wait and realize the full value of the investment, given its potential, which is unarguably huge over the mid to longer term? One thing is certain, given the present investment climate and rising operating costs, any major bidding for us will aim for the lowest possible price, so we can expect some very tough bargaining.

2. Joint Venture.

In some respects the more attractive option, and the one that I favor. It leaves the shareholders with an ongoing stake plus a share in whatever future resources are uncovered, both at FDN, and within the general area. This solves the problem of financing and expertise, and leaves the core exploration group in place to assume their role within the larger context, which could include future exploration elsewhere in-country. It also solves a problem for the JV company, since they may not be prepared to make a full commitment to Ecuador until the political situation stabilizes. In the meantime, it provides them a presence, and an opportunity to work at ground level in this new, potentially highly rewarding environment. Besides a major, this option presents an opportunity to a mid-tier company targeting expansion, who, while lacking the resources to execute a full buyout, would nonetheless like to establish a presence in Ecuador. In this scenario, some form of Government participation may be desireable, given the capital required. This could amount to a three-way partnership, or a straight financing arrangement which could reduce potential funding problems caused by the recent banking crisis. This scenario could also provide for a merger at some future point, including expansion via exploration or acquisition within Ecuador, and possibly neighboring states.

3. Go It Alone.

This undoubtably represents the most risky approach, and the one most prone to failure as history demonstrates. It can succeed, and the prerequisite for that success exists in the form a major discovery, and the potential to attract top personnel. All considered, this option would have to be carefully examined, as it represents the highest risk, and may not, in the long run represent the best return on investment, given potential pitfalls and the steep learning curve involved. However, in the absence of a fair offer, or reasonable JV proposal, this option should be considered, and our present efforts should be focused in this direction, in the possibility that it becomes our only recourse. We are fortunate, in the sense that the size and grade of the deposit allows for early cash flow, which offsets the issue of financing and/or potential dilution that accompanies such an approach.

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Clearly the goal of exploration companies is to discover and prove up a viable resource, then sell to a major at the best possible price. Occasionally, circumstances dictate a different approach, amongt them, a lack of reasonable bids, or simply the size and potential of the discovery. This may indeed be one of those cases, and in this light, the various alternatives presented should be seriously examined.

This is my best summary of the options. If someone can add to these, or make additional points, either favorable or critical, I welcome their contribution.

ebear