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situation with you at any time.

Very truly yours,

WEHRLI AND WILLIAMS

"Doston I. Williams

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This memorandum is in response to your memorandum of March 24, 1977 and attempts to answer questions posed by yourself on that date.

The first question posed is in regard to the effect of
failure to do the required $100 per year assessment work on
all claims. The law in Wyoming presently provides that
assessment work may be done in groups of claims when the
work in one claim is of value to adjoining claims. There-
fore, if one should do $1000 work of drilling or other
qualifying assessment work on Claim A and by the nature of
the geology and other relevant factors, this work is of
value to numerous adjoining claims; the amount of assessment
work may be apportioned to the other claims. In the part-
icular case of the Red Desert and the Fremont claims therein
which comprise approximately 18,000 claims consisting of 527
square miles, it is possible--if not likely--that some of
those claims would be invalid. The fact that some of the
claims are invalid has no relationship to other claims where
the assessment work has been validly done. By invalidating
one claim or one group of claims, it has no affect upon the
validity of other claims. In order to determine a claim
invalid, each claim must be proven invalid. There is no
"infectious invalidity" in this area of the law.

Of those claims which were found to be invalid or are be-
lieved to be invalid, the law allows a prospector to retain
possession while he is working the claim, to include properly
staking the claim or doing the assessment work.
It is Mr. Williams' belief that the Supply System should
deal with "the majors". The majors being larger exploration
organizations such as Exxon, Union Pacific (doing business,
as Rocky Mountain Energy), Western Nuclear and similar
organizations. Mr. Williams does not necessarily believe
that Fremont--and specifically, Mr. Murphy--will be unable
to properly stake the claims, do the assessment work or hold.
the title. However, Mr. Williams has litigated for and
against Mr. MacGuire and has an appreciation of the man.
Mr. MacGuire, for reasons not completely known to myself,
feels that Mr. Murphy--but more particularly, a Mr. Schauss

who is Chairman of the Board of Fremont Energy Corporation-has not treated him fairly in the past and would like an opportunity to get even. Mr. Williams anticipates, regardless of how well Fremont and the Supply System conduct their operation in the Red Desert, that Mr. MacGuire will be at best a nuisance. Mr. Williams, as his letter indicated, recently concluded litigation with MacGuire concerning certain claims held by Continental Oil Company, which Mr. MacGuire successfully proved in court that approximately two-thirds of the claims were invalid. Mr. Williams' point is that if an organization such as Continental Oil Company, attempting to do its assessment work conscientiously, was found wanting in court, he has grave reservations whether a much smaller organization such as Fremont will be successful against an overstaker such as Mr. MacGuire.

Mr. Williams has suggested to me in the past that it might be prudent to hire Mr. MacGuire to properly stake our claims. I am not aware of the actual cost for this exercise, but from Mr. Williams and others I have learned that Mr. MacGuire will charge approximately double of what it can be done otherwise. The obvious benefit of hiring Mr. MacGuire is that it would preclude him from attacking the validity of our claims. He could not on one hand stake our claims and then later overstake the same claims and argue the invalidity of his own prior staking. This would be an untenable position. It has been made clear by Fremont Energy Corporation that they do not desire to have Mr. MacGuire retained for any purposes. I doubt, due to the animosity between the parties, that any working relationship could be achieved.

It is a criminal offense and an actionable civil wrong to falsely file a location certificate or affidavit of assessment work within the State of Wyoming. WCS Section 6-154.2 provides:

Offering False Mining Claims For Filing Every person
who offers any location certificate for a placer
mining claim or lode claim or affidavit of assessment
work to be filed in an office of a county clerk of this
State in behalf of himself or for any other person or
any person who procures others to do so, knowing that
the claim certificate or affidavit was not preceded by
a proper location of the claim physically upon the
ground by the establishment of a proper notice of claim
and the designation of the surface boundaries of the
claim by substantial posts or monuments as required by
the laws of the State, shall be punished by imprison-
ment in the state penitentiary for not more than five
years or by a fine of not more than $5,000, or by both.

I have copies of all of the Proof of Labor Certificates filed by Fremont concerning the several claims. I have attached one herein which is representative of all the Proof of Labors. The nature of the assessment work performed by Fremont Energy Corporation does not lend itself to verification by investigation of the premises. The Proof of Labor, in pertinent part, recites that the assessment work has been done by surface surveys, surface geological, geophysical or other examination or surveying of the surface formations, correlating surface or underground formations by geological comparison or otherwise, photographic work--black and white, color, infrared or other type of film on out crops, etc. This type of assessment work was found not to satisfy assessment work in the case of Lewis v. Carr, 49 NEV. 366, 246 PAC. 695 (1926). However, a recent federal statute has provided that assessment work may be satisfied by geological, geochemical and geophysical surveys conducted by "qualified experts" and verified by a detailed report filed in the county office in which the claim is located... 30 USC 28 (1958). In light of the current federal statute and the age of the cited case, it would be difficult to categorically state the assessment work was improper.

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State OF. WYOMING

)

) ss COUNTY OF SWEETWATER /

PROOF OF LABOR

Before me, the subscriber, personally appeared W. J. Murphy, who, ing duly sworn, says that assessment work on the following named un

cented lode mining claims has been done for the current year or has been started in part or is now in the process of being done and is projected to continue until such time as may be required to complete such work. Such assessment work has been or is being or will be performed at many places on the mineral claims hereinafter named. This assessment work consists of many types and kinds of work or activities or expenditures, among which may be any of the following: Travel to, from and on the claims by any employees, contract workers or geologists or other personnel; radiometric surveys; radiometric map preparation; surface surveys; surface mapping; drilling operations, geologic examination of drill hole cuttings; geological, geophysical, or other examination or surveying of surface formations; correlating surface or underground formations by geological comparison or otherwise, water sampling and analytical work on water sampling; payment of wages by money or other things of value to contract workers or other workers; photographic work - black and white -'colored - infra-red, or any other type of film on outcrops, drill hole cuttings, surface exposures, terrain features, geological requirements, and other desirable photography; resetting or replacing of posts, or any other markers of any kind; geological, geophysical, or drill hole, or any other types of reports; rental or repair of equipment, and other kindred expenditures; road construction, road repair; expenditures for supplies and equipment and/or related repairs; and any and all other means that may have been or will be applied to such assessment work. The claims to which the foregoing pertains are located in Sweetwater County, Wyoming

and are described as follows:

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ball Claims, beginning with No. 2 and numbered more or less consecutively through No. 1100, and located in Sections Nos. 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 and 32, Township 24 North, Range 98 West; in Sections Nos. 5, 6, 7, 8, 17 and 18, Township 23 North, Range 98 West; in Sections Nos. 1, 2, 3, 4, 9, 10, 11, 12, 13, 14 and 15, Township 23 North, Range 99 West; in Sections Nos. 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 21, 22, 23, 2 25, 26, 27, 28, 33, 34 and 35, Township 24 North, Range 99 West.

Such assessment work is with the authorization of Ralph Schauss and Fremonti Energy Corp.

owner of said claims, for the purpose of holding legal title to said claims.

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6.3.9 CAGI

IN BOOK.

CREEN OVER WYO.

5.30. 1723.61% LTVO VESCO, COUNTY CLERK

NO.......

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