I don't believe a negative outcome has much merit for two reasons.

1) SLI through their subsidiary Minera Santa Elisa has had repeated success in obtaining permits for both Tesoro and Vilcoro.

2) Permit applications are rarely outright denied. There may be factors that need to be addressed or modification of plans but, by in large, the system is designed to succeed.

Any glaring missteps on St Elias' part would have shown themselves during the "Observations" period last Oct-Nov or by the review conducted by Paul Gray.

3.4.1 Permitting and Environmental Liabilities

An Environmental Impact Study (“E.I.S.”) is required by Peruvian law to be filed for all

exploration and development projects in the Country and acceptance is required to secure permits

necessary to conduct the requisite exploration and investigations described in this report including

exploration drilling. An E.I.S. for the Tesoro Project was completed and filed with the Peruvian

Government in early 2007, in relation to ongoing exploration and development. The time limit for

this E.I.S. expired in early 2010, and St. Elias completed and filed an updated E.I.S. in August,

2010. Currently, the Tesoro E.I.S. has been submitted to the Peruvian government and is under

review, ‘Observations” from the government review are expected by early October 2010.

To the best of the author’s knowledge, the Tesoro Gold Property does not have any outstanding

environmental liabilities attached beyond the obvious underground and surface development that

St. Elias has conducted over the last five (5) years. The Currently filed E.I.S. contemplates

remediation of any and all surface disturbance caused by St. Elias during the course of superficial

exploration programs within its closing and abandonment provisions.

And from Page 37.

An Environmental Impact Study “E.I.S.” as required by the Peruvian government to conduct

work on the Tesoro Project has been filed by St. Elias in support of the ongoing exploration

efforts on the Property. This document has been reviewed by the author. Before any substantive

exploration work (as described below) can begin, this document is required to be accepted by the

government. It is critically important to the Project that the E.I.S. is accepted, and all immediate

efforts should be focused on this task.