PT MSM clarifies

PT Meares Soputan Mining (PT MSM) wishes to clarify statements made within an article in The Jakarta Post on Monday, Dec. 5, as in some respects we suggest these are incorrect. PT MSM met openly and in the spirit of co-operation with various press representatives on Friday, Dec. 2, at their request and all statements to the press were recorded and witnessed.

PT MSM wishes to provide a correction to your article as follows:

1. This news article may be interpreted to link PT MSM to the NMR -- Buyat case which is still in process within the Indonesian court system and hence this is inappropriate.

We wish to clarify that PT MSM has not commenced full constr0uction of the Toka Tindung Gold project and has no tailings discharge at this time. The Toka Tindung tailings will comply with Indonesian and international environmental standards and is in fact very similar in character to the sediments on the sea floor. PT MSM has conducted recent ecological studies in the area;

2. PT MSM has not dismissed community fears and or government concerns at any time. In fact the Company has socialized the approach for developing the project to the community and government as stakeholders and will continue with this proactive approach;

3. A representative group of community from villages in the area of proposed STD also visited Ministers and government representatives last week. They are supporting the projects development as shown in the attached documents;

4. PT MSM will contribute around US$60 million in expenditure during construction of the Toka Tindung Gold Project and over the life of the project contributions in terms of tax, royalties, work for contractors and support businesses, salaries and community development programs are estimated at $200-250 million over a six year period;

5. PT MSM has studied land based tailings and it is a similar cost to STD over the life of the project. STD does provides the best environmental solution to tailings disposal;

6. The discharge of tailings is located 10 kilometers from the northern end of Lembeh in deep water and will have no effect on the biodiversity in the Lembeh Strait or fishing in the area. In fact the Company has several business development programs supporting local fishing and fish from this area is supplied to the mine site;

7. PT MSM has a valid Contract of Work and is working in accordance with requirements of this agreement.

Various stakeholders in the local community and government have been in communication with me today expressing their concern at some of the incorrect statements regarding PT MSM in respect to the Company's planned activities.

PETER BROWN, General Manager/Director, PT Meares Soputan Mining/PT Tambang Tondano Nusajaya