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upjaq24

01/21/07 7:13 PM

#1310 RE: Specalculator1 #1309

We have all been aware that the company is working very hard "behind the curtain" to identify and address the issues identified in the 12/27/06 PR. Before you read the rest of this information, you may wish to review that PR because it was very accurate and informative. You may wish to make note that there are very good points in that PR as well.

A small number of very large shareholders (the "Group") have formed a working group to assist in addressing the issues in that PR. A few other shareholders were fortunate to attend a status call with them on 1/16/07 to get an update on who they are, what they are doing and how it may effect us all.

This update will cover issues that were discussed, including issues related to: the group, the problems, the company, the share structure, the threats and the progress.

You need to take this information with a grain of salt because although verified after the call, it is just my recollection and not necessarily absolute fact. NMC Management will not communicate until all issues are identified and/or there are material events for them to report. The Group has a bit more flexibility in terms of communication, and this is why this information is being shared. It is thought by the Group that there is a very good chance of a positive outcome for us.

As of this morning, progress is good. Prospects are good. On the other hand, if negotiations fail (which look unlikely), our future will be rougher.

Now is not the time to dump your position (IMO).

As Bigeasy put it, "Now ain't the time to wander off".




The "Group"

This group is comprised of a small number of very large shareholders that represent about 2.5 Billion shares. They are businessmen, smart, extremely diligent, honest (as far as I can tell) and articulate. Only one or two visit our board from time to time. Bigeasy is one of the main drivers of this group. They have done extreme DD and believe in the potential of the resources that NMC has.

They are very engaged, working 10 & 12 hour days on this.

They have very deep financial, legal and business resources that they can and will leverage for this issue. One representative deals directly with Maurice.

There appears to be a very good balance of rationality and heavy brass knuckles. I was very concerned originally that (due to their position sizes) they may not represent the "average" shareholders intentions. (Thus the polling I did to get a reading on how we feel). This group has their own interests driving them but have family and friends like us with smaller positions and are VERY sensitive to the issues and potential losses that we all face. I mean that. Most can afford to lose their return, but have immediate family and friends that can not.

Their goals are to:



1. FIX THE PROBLEM. Protect and restore shareholder value
2. Get us back to an operating, profitable business with a market cap that can support the share structure. Get the ore sales going.
3. Doing the "right thing" for all shareholders. Justice is important.




The "Company"

Mike and the board have agreed to stay on board to see this get fixed. They are committed to this.

The company is no longer controlled by the Furlongs in any way. Shareholders, like us, now own it.

A shareholder meeting will be planned, and full disclosure is anticipated.

The company WILL PR material events as they occur. Initial buyer performances are considered material, although a year from now they may not be.
(my observation is that as far as this entire issue goes, a PR may not be immediate until the share structure is CLEARLY identified and terms are complete)

The 2006 audit is close to completion and there will be a new custodial assay done within a week. This will show value and financial controls.



The "Major Threats" and what is being done to address them


1. That this process, lawsuits, stonewalling and deceit could drag on for an extended period (1 - 3 years) potentially collapsing NMC.

ADDRESSING THE THREAT:



a. Formation and involvement of the Group and all of its experience and resources
b. Aggressive presentation of the serious/fatal consequences for Maurice if he does not do what is right for the company and for the shareholders. Maurice has claimed to be committed to doing what is right.
c. Desire to get "terms" agreed to and signed, and then do the legal follow up over time.


2. That the shareholders will perceive any type of collusion or inappropriate leniency in the conclusion of this.

ADDRESSING THE THREAT:



a. Involvement of the Group to make sure all is done for the best of the shareholders.
b. A company meeting which will deliver the history, details and terms, to the extent that they can be.


3. That the buyer will not perform.

ADDRESSING THE THREAT:



a. Regular contact with the buyer to make sure he is still on board, which he is. Also, Payment from the buyer is due at the end of the month, not mid-month as many shareholders wrongly believe.
b. Contingencies for approaching other buyers, should the current buyer be in default.




The "Timeline"

The company will probably go into a great deal of detail when they disclose what went on, but in general, here's a brief timeline:

Q3-Q4/04 (background info)

The Class A "poison pill" was put into place without proper voting and involvement of, or disclosure to, Mike and the board.


Q3 06

The auditing firm discovered some 200+ million shares over Authorized. Immediate actions were taken by the Company to halt issuance and begin a detailed audit of share issuance.

The internal transfer agent "misappropriated" some 70-75 million shares and was immediately terminated.



Q4 06

Maurice announces a 1.7 Billion share over-issued situation based on auditing of his records/certs.

Maurice converts 20% of his preferred (100MM) to common (500MM).

The Group forms to sort out and fix the 1.7 Billion issue as well as to be sure that control of the company stays with the Shareholders.

Attempts to leverage the increased position into control of the company by Maurice so that he could Reverse Split "fix" the 1.7 Billion is denied and defeated by the BOD and the Group.

Negotiations are ongoing with Maurice to "make this right".





The "Share Structure"

The entire share structure is being documented and will be released when it is clearly understood.

At this point, the Group believes that the 1.7 Billion number is expected to be on the high side and that as the remaining 300 certs are analyzed and tallied, it may be substantially less. This in combination with "Killing the Pill" will result in a less foreboding and more encouraging picture.

The Group would like to communicate what it finds out about the share structure in the very near future. They are not hiding anything here, they just do NOT know the exact numbers and want the info to be correct when they share it.

Suffice it to say that all agree that 1.7 should be adjusted downward.

It is not clear that an increase in the AS is required or not, and if so by how much. It is almost inevitable that an upward adjustment (hopefully small) will be required. A RS was not discussed as an option at this time.

It appeared to me that when this is done, the OS will equal the AS.