FMNJ- June 12 letter
http://www.franklinmining.com/investorinfocenter/mostrecentletter.html
Date: June 12, 2008
From: The Office of the President
To: Franklin Mining, Inc. Shareholders
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First, an explanation for the delay in releasing my June letter … negotiations
concerning the next level of growth for Franklin Mining, Inc. are nearly complete.
Each time I thought it was appropriate to make an announcement, there was a
reason to hold back.
Today, I am – literally – waiting anxiously for the right moment to release exciting news about
our company’s oil and gas opportunities. In preparation for the coming events, I thought it
would be helpful to explain how Franklin, the mining company got involved in energy
projects … a few words, explain how we got to where we are.
As most of you know, I have been Franklin’s President since September 2007 but had served
the company as a consultant and advisor for about three-and-a-half years before that.
In 2003, I was introduced to WCM Capital, Inc, the company that would become known as
Franklin Mining, Inc.
In 2004, I became a consultant to and shareholder in Franklin Mining, working along side Mr.
Melgarejo as an advisor, searching for international business opportunities.
You may ask WHY? Why would I take an assignment from Franklin Mining knowing the
problems it had before the new management took over? I did so because of its “history” –
Franklin owned a mine in Colorado dating back to 1854 and that made it one of the oldest
mining companies in the States; I also knew that in Latin America the company’s history
would open many doors. (As you know, we still own the Colorado property and our lawyers
continue working on those issues.)
Looking for a project that would benefit Franklin, I traveled to Colombia where I’d been
involved in mining and oil and gas businesses for ten years. Franklin was offered a mine
named the El Arcon, later to be renamed Santa Catalina. This mine had gold reserves but
required about $6,000,000 in pre-development cost. Because of the funding requirement,
the Contract could not be accepted.
At the same time, I traveled to Bolivia where I’d had business relations since 1986. In
Bolivia, Franklin entered into a mining contract in the Northern Part of Bolivia resulting
in a small cash flow.
Every mining company that has had or has tried to establish an operation in Bolivia knows
that you must have the support of the workers, the Cooperativas. As I was in negotiations
with COMIBOL, the National Mining Company of Bolivia, and the Minister of Mines, I
also worked with the Cooperativas and made sure that I had their support of each project.
With the offer of a partnership with COMIBOL came Memorandum of Understanding on
several projects:
Telamayo initially looked good but due diligence revealed that it would have been hard
to complete.
Pulacayo also looked good. This contract was with a private company, Rolando SLR.
After spending close to $50,000 on due diligence and after hiring a geologist, Mr. Paul
Baker, it was determined that it was not in the best interest of the company to proceed
because of environmental concerns and potential liabilities.
Cerro Rico was my favorite project because of the history. I love this Mountain.
Many Franklin investors came to see and walk Cerro Rico and agreed it was great.
The problem was that when we hired a consultant to do our feasibility study, they did
not meet the dead line. Franklin was granted an extension and when the study was
delivered to COMIBOL without our review, it was not accepted. I attended the meeting
with COMIBOL Engineers who pointed out that our study was not complete. So. our
“feasibility study” became a “pre-feasibility study.”
At this point, we have invested $225,000 in studies. Cerro Rico is not a lost opportunity.
We have made an offer to COMIBOL to extend our contract and we will provide a full
and complete feasibility study.
Now, along comes the Escala … the heart and soul of Franklin Mining, Inc. Keep
watching The News!!!
As we worked our way through these mining opportunities, Franklin Oil & Gas,
Bolivia was formed. Being a new company, it did not have the advantage of history
the way Franklin Mining had. Still, we were able to negotiate multiple MOU’s
(Memorandum of Understanding)
-- a 10,000 barrel per day GTL plant to help Bolivia ease the dependency on
imported diesel fuel
-- a separate YPFB agreement for oil field development
-- an agreement with the Department of San Matais to build a 40 Megawatt
power plant
-- an agreement with the Department of San Tarija to build a smaller plant
-- an agreement in Ayo Ayo for another plant.
The problem with these agreements is that there is no natural gas to provide to the projects;
Bolivia has committed the development reserve to Brazil and Argentina. At the present time,
we are in a holding pattern on our GTL projects in Bolivia; however, this is an improving
situation.
As a result of the YPFB agreements, I was invited to come to Argentina and from that meeting
it was decided to form Franklin Oil & Gas, Argentina SA which now holds a Letter of Intent
from the Government of the Province of Tierra del Fuego to construct and operate a 10,000
barrel per day GTL plant.
There are exciting and meaningful benefits coming from our Letter of Intent with Tierra del Fuego.
I have been promising this news for weeks now and it is coming, soon. However, at the present
time, we are still in our final negotiations and our attorneys have asked that I make no further
announcements until after all documents have been signed.
Having said all of this – laying the groundwork for the next stage of Franklin’s growth,
I must wait until our attorneys tell me that details can be made public.
You’ve waited patiently … I respect that and hate having to ask you to wait longer.
Please accept my assurances … as soon as I have been released from all Confidentiality
Agreements, I will provide details.
Sincerely,
William A. Petty, CEO
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