Legal Matters, page-111

Md,

I have only read the dismissed appeal judgement and various Alliance announcements so that is all I have been working from.

As stated in my last reply to you and according to what I have read "the JVA appointed Heathgate as manager, which continued after Quasar's assignment, and the JVA appointed Heathgate as Alliance's agents for the sales and marketing of the product."

If I have interpreted the judges words properly, Heathgate are the agents under the JVA, not Quasar. Heathgate and Quasar are separate legal entities, although according to the judgment, paragraph 11.

"Heathgate and Quasar have a close relationship, given that the shareholdings in both Heathgate and Quasar are controlled by Baywood Holdings Inc. Notwithstanding the assignment, Heathgate continues to act as manager of the JV and perform the exploration work on Quasar’s behalf as its delegate."

How this plays out in terms of any damages claim I really don't know. I will say the following, and this is absolutely pure speculation. Should Alliance win a damages claim against Heathgate, but somehow Quasar are not found liable due to factors or defences which may be available to them, it might come down to what available assets Heathgate has at its disposal to dispose of any damages claim against it, as to whether or not Alliance can recover any damages. Alliance could gain their rights to selling the product for the mine again but not be able to recover damages from Heathgate if it doesn't own sufficient assets. May be someone who knows the story better might care to speculate on what assets Heathgate own.

Sorry to throw this in but I just thought of it.

These are just all my speculations and opinions, I'm not a lawyer, I have never had any legal training. Do not rely in any way on what I've said. Do your own research. Seek professional advice if you are unsure about any investment decisions and their suitability to your particular circumstances.

Eshmun