October 05, 2015

President's Letter to Shareholders

Dear Shareholder:

This letter will serve as an update to our shareholders as it has been almost 2 years since our last letter went out in late November of 2013. At that time we advised shareholders that the Company had put all projects on care and maintenance until a clear mining policy, tax regime and an end to the moratorium on the issuance of mining permits is implemented, and that the Company would spend no further funds on any of its projects. To date, none of the above has been accomplished by the current government and the mining environment in the Philippines remains ‘hostile’. Presidential elections in 2016 will see a new administration and hopefully a more progressive view on mining policy.

Company Synopsis:
Since inception, the company successfully completed the acquisition of several key Philippine copper and gold projects, including the Hinoba’an and Basay copper porphyry projects. The company then proceeded to spin out the Hinoba’an project in exchange for shares in Copper Development Corp. These shares were successfully listing on the London AIM market by Copper Development Corp. (CDC) following an oversubscribed IPO which raised $65m USD. This allowed the company’s shareholders to receive CDC shares thus creating initial liquid shareholder value.

Subsequently, the company entered into a joint venture with CDC on the Basay project, which allowed CDC to earn up to a 70% interest in the project by completing a bankable feasibility study. CDC spent in excess of $14m USD and drilled 32,878 meters on the Company’s Basay Copper-Gold-Molybdenum Project, resulting in the definition of a maiden inferred copper resource of 410.4 million tonnes at .4% copper, almost doubling the historic resource. As of 2013, CDC put the project on care and maintenance and announced that it did not intend to do any further work on the project, largely due to political and permitting uncertainties.

In January of 2015, CDC relinquished all of their rights to the Basay Project and returned a 100% interest in the project to Solfotara. The project is currently being managed by Solfotara on care and maintenance basis (core farm maintenance and security) awaiting renewal of the exploration permit.

The company has several other exploration permit applications pending and the company strategy in the Philippines is to continue to wait for government policy to be clarified, and wait for permits to be issued while preserving the company’s rights to the assets.

Moving Forward:
Solfotara is currently looking at options to find a way forward to realize value from the companies Philippine projects. Nothing can move forward until permitting issues are resolved, which the current administration has shown no incentive to resolve, or issue or renew permits. The company is looking at several possibilities for funding, whenever permitting issues are resolved, and current corporate expenses are being met to keep the company and the Basay Project current. Thanking you for your long term support.
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Brian Lueck, President, Solfotara Mining Corp.