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January 27, 2010
Dear Shareholders,
We recently announced a proposed merger with Vaaldiam Resources Inc. ('Vaaldiam') that launches Tiomin in a new direction to be a diamond producer in Brazil, with production beginning by approximately mid-2010. If you and the shareholders of Vaaldiam approve the transaction in mid-March, the resulting company will soon be cash-flowing with a solid balance sheet and an excellent pipeline of new projects underway. We ask that you carefully consider this proposal, which we believe to be in your interests.
We have reviewed almost 40 transactions in the last three years and we feel comfortable that this proposed deal will be good for you as shareholders. After the tumultuous and distracting events of 2009, during which a frivolous lawsuit significantly damaged your interests, we are pleased to have found a satisfactory deal to put in front of you for consideration.
We regret Jinchuan Group Limited's decision in October not to proceed with the Kwale project because it wasted two and half years of your time and money but we ourselves acted in good faith and are now seeking alternative means to realize some value for you.
In Peru, our Pukaqaqa copper-gold project is generating significant interest from our partner, Milpo, and we are also working on extracting some short-term value for you there as well.
We are also very excited about our investment in Kivu Gold Corporation, where we have a 30.8% interest. The strategy of Kivu is to be a "First Mover" in recognizing African opportunities, and to be one of the first to acquire a land positions in areas with favourable geology but complex political situations.
In closing, I want to thank you for your continued support, and I look forward to updating you shortly.
Sincerely,
Robert Jackson
President & Chief Executive Officer
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