First American Scientific Corp. (fka FASC)

[Hongcouver]

Atlas Mining President's Message to Shareholders

From http://www.atlasmining.com/releases.html#April%204,%202003

August 1, 2005
Osburn, Idaho

Message to Shareholders

For the past year we at Atlas Mining Company have been utilizing our expertise, financial and manpower resources to bring the Dragon Mine into production. Where there was only barren ground a little over a year ago, we now have a complete infrastructure with water, septic, electrical systems, compressed air, a mill building with KDS milling machine, complete with hopper, conveyor and bagging platform. Our ore pad has halloysite clay on it, and our miners have opened up the upper portion of the halloysite clay bed with over 1,000 feet of decline and underground tunnels, and we are moving toward the lower areas. As a small mining company we have had to make do with limited resources, and it is the great group of guys that have worked at this project for the past year that got us to where we are. They have exhibited the entrepreneurial spirit of the true “gypo” miner to make this project move forward. Even when the elements were not agreeable they worked hard and long hours to accomplish the tasks. The next step is to start selling the product. We have many willing buyers. They have been waiting for us to prove that we can produce the product. We will soon start inviting these buyers to our property to inspect the processing and mining activities. Our biggest concern will be whether we should tie up our production on the conventional users or keep a supply available for the microtubule and nano users. Our partnership with both Nano Dynamics and Natural Nano are proving there is a very valuable market in this area. We expect that we will be receiving orders from this market soon.

The company recently accepted $4.4 million from existing long-term institutional investors through a restricted stock sale. With these proceeds we can purchase the mine, pay off debts and have the necessary funding to move the Dragon Mine into a more productive stage. Improvements to the mine may include an onsite lab, different processing methods, additional underground exploration and development. As you know we have been very frugal with our money as we have developed the Dragon Mine. As I look back, it is easy to see where we delayed tasks, or could have accomplished some of our goals faster with funding. It is our intent to keep a frugal attitude, but now we can tackle our goals faster. We have already hired a geologist with a geo-chem background. As we move into the Dragon deposit we find that the chemical makeup varies somewhat, and having someone on staff to help us determine these variances will eliminate the guesswork and the cost of being continually dependent on outside labs.

Contracting work was slower in the first half of the year. We had completed a couple of jobs and moved some of those people to the Dragon Mine. We have recently been awarded the bid to install ore passes for muck transfer and chiller stations for ventilation underground at the Lucky Friday Mine for Hecla Mining. This project will help supplement our cash flow for the next six to seven months. We are also negotiating a timber sale to a local mill on some of our property in north Idaho. If consummated, this sale will also generate additional cash flow.

In other items of importance, Dr. Ron Price has agreed to join our board of directors. Dr. Price is the Navy Research scientist that discovered the microtubule technique patented by the Dept. of Defense. He has been very supportive our efforts to bring the halloysite microtubules into the nano markets. We are very pleased that Dr Price feels comfortable enough with our company to become a part of it.

Over the past year we have been able to attract new shareholders with a vision and loyalty that has been the mainstay of the original Atlas shareholder dating back several generations. By having a stable shareholder base, the company can continue its goals on your behalf knowing that our efforts will bring a reward to everyone of us. I thank-you for your support and will continue to work on your behalf.

Sincerely,
William T. Jacobson, President