In reviewing the proposed program (summarized below), we question if 543,000 feet of wide and close spaced drilling over the two year period will be sufficient to identify even one ore body from, say five to eight targets. This amounts to roughly 1000 drill holes, or 120 to 200 holes per target. Offhand, this would appear to be inadequate; however, only actual drilling will tell since the ultimate proving or disproving of the presence of uranium ore bodies must rest with sound geology and the drill bit.

I am enclosing what I will call my opinion letter in which I
have hit the high spots of the proposed agreement submitted
to you by Fremont Energy Corporation. I have held this back
hoping that Houston would be in the office, but as soon as
he returned from Seattle he left immediately for Cheyenne
and will be there until the first of the week. Therefore,
these are only my own reactions to these agreements and are
not a composite of our joint thinking. I felt, however,
that you should have at least this much without further
delay.

I finally was able to contact Mr. Hofer, attorney here, whom
Houston had heard was conducting an action on behalf of its
stockholders against Fremont Energy, but he informs me he
knows nothing about such an action nor had he ever heard the
name of the company. Therefore, if such an action is
pending, we have not yet been able to verify this fact or
get any information concerning it.

You have explained to us that the Supply System has been
negotiating with Fremont Energy for the purchase of in-
terests in certain lode mining claims purportedly staked and
owned by it in the Red Desert area of Sweetwater County,
Wyoming, and you have left with us for study and review two
agreements and a form of "Mining Deed" proposed and sub-
mitted for your approval by Fremont. You inform us that
these agreements concern some 18,000 such lode claims. It
might be better to discuss and analyze these documents
separately.

I CONSULTING AGREEMENT

Broadly, this agreement recites that Fremont owns or
has the right to acquire certain lode mining claims sup-
posedly described upon Exhibits A and B, but which exhibits
are not attached to the copy of this document left with us,
and that you (Supply System) desire to conduct certain
exploratory operations on these lands and to acquire an
option to purchase those claims indicated as valuable by
virtue of this exploration. The main thrust of this agree-
ment is an employment contract whereby you retain Fremont to
represent your interests as a consultant, to explore these
lands and to assist you in the development of ore bodies,
which exploration and consultation is referred to as "the
project".

This agreement contains several definitions of the terms used which includes "area of interest"

11 an area

lying within 5 miles of the described lands ("said lands"), except a certain State of Wyoming lease particularly described, within which you may acquire claims or other interests under