|August 27, 2012|
President's Letter August 2012
I hope that you and your family are enjoying a great summer.
The Cosigo group is focused on advancing our Machado Project in the highly prospective Taraira Gold Belt along the border between Colombia and Brazil. This area is called the Traira Gold Belt in Brazil.
We are still waiting on a Forestry Reserve Subtraction on the Machado Project from the Colombian Government. We have completed all required public meetings and reports that have been asked for, and have waited through the time periods for each and every process and procedure. We also have the overwhelming support of the local people and their towns and communities.
We keep in contact with the ministry staff and the Ministers and Vice-Ministers' representatives. We have asked our Colombian lawyers to suggest possible actions to help speed up this Forestry Reserve Subtraction Process. It is our understanding that no other exploration companies wishing to operate in the Forestry Reserve areas of Colombia, which cover 55% of the country, have been able to get their subtractions approved during the past year.
While the procedures within the Colombian government move slowly, we remain positive and are firm in our conviction that the Taraira Gold Belt has excellent potential to host world-class gold deposits. The planned initial exploration program at Machado remains fully funded. Cosigo has sufficient working capital and we continue to keep our monthly expenses as low as possible.
We are continuing to have our prospecting teams explore and sample in the Traira Gold Belt outside of the native areas on the Brazilian side of the border. The regions we are presently focusing on do not have a forestry reserve. The information acquired has led our team to select additional targets in these areas. Progress in Brazil is more rapid than we expected. Negotiations are moving forward and the government has indicated that it intends to approve a pilot project in the native area.
We have completed a Memorandum of Understanding and a Letter of Intent with the natives and their communities and the local and State authorities in Amazonas, Brazil. The Cosigo group is now finalizing a third document to allow us to start a pilot project with the objective of developing mining opportunities in the native areas. The Letter of Intent gives Cosigo the option to enter into a mining venture where it has up to 75% interest on projects identified by drilling. The native communities will retain a 25% interest in such projects. This region is host to large areas of geology similar to that of Cosigo's Machado Project in Colombia. Several areas of historic gold production and numerous gold showings are known in the region.
Cosigo arranged visits by several North American aboriginals to explain to the local Colombian and Brazilian natives and senior government officials that they have successful mining ventures on their traditional lands that have brought employment, skills training and economic benefits to their communities. They were well received by native people and governments of both South American countries. The positive relationships developed are continuing to grow.
To rapidly sample target areas in Brazil, a man-portable percussion drilling system is being developed, which will have the capability of vertically sampling to a depth of 150 feet in a very short period of time. This system will have a minimal environmental impact on the target areas and can be easily moved and operated by the local people with a limited amount of training required.
We will continue to keep you informed of our progress in Colombia and Brazil.
Dennis W Milburn
President & CEO
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