This is a continuation of the previous assumptions and limiting conditions page and details some of the more common items normally contained in a real estate or real property appraisal or valuation report.

Appraiser is legally regulated under federal and state law by the Uniform Standards of Professional Appraisal Practice (USPAP). This attachment is intended to supply Client with necessary information about Appraiser’s engagement performance and reporting assumptions and limiting conditions.

This engagement and report are for no purpose other than property valuation and Appraiser is neither qualified nor attempting to go beyond that narrow scope. Client and other users of the report should be aware that there are also inherent limitations to the accuracy and reliability of the information, analyses and conclusions contained in this report. This appraiser assumes that readers of the report are knowledgeable of the relevant processes involved in the exploration, development, production and reclamation of mineral properties and have a working knowledge of the economics and commerce of the mineral products covered by the report. Before making any decision based on the information, analyses and conclusions contained in this report, it is critically important to read this entire section and to understand these limitations. Neither the processes used in this engagement nor the report can be used as a substitute for Client or third parties to perform the proper due diligence required in the performance of their business.

Special/Extraordinary Assumptions and Limiting Conditions:

Hypothetical Conditions:

Departures from USPAP: Appraiser may depart only from the following USPAP Standards. Performance: 1-2, 1-3, 1-4, 9-2 and 9-4. Reporting: 2-4, 10-2 and 10-4.

Confidentiality(USPAP SMT-5): An appraiser must not disclose confidential factual data obtained from the client or the results of an engagement prepared for a client to anyone other than: 1) the client and persons specifically authorized by the client; 2) such third parties as may be authorized by due process of law, and 3) a duly authorized professional peer review committee.

Under USPAP the obligation of the appraiser to protect the confidential nature of the appraiser-client relationship is neither absolute nor clearly understood. The appraiser-client relationship envisioned by USPAP is not comparable to the attorney-client relationship. With regard to factual data supplied to the appraiser by the client, the client is in the best position to decide what data must be considered confidential and to provide an explanation for such a determination. Data furnished by the client to other persons or entities without a confidentiality condition, or that is already in the public domain, do not become confidential when given to the appraiser. All other factual data obtained by the appraiser from any source are not recognized as confidential by USPAP, unless the appraiser has been advised of the confidential nature of the data. When the appraisal report is addressed to the client, any confidential factual data given to the appraiser by the client and relied upon in the appraiser’s analyses, opinions or conclusions may be specifically cited in the report without violation of the confidentiality rule. USPAP recognizes that such data are to be treated as confidential only when the client specifically instructs the appraiser that the factual data are confidential.

Appraisal is made under conditions of uncertainty with limited data: Limitations result from a lack of certain areas of expertise by Appraiser (that go beyond the scope of ordinary knowledge of an appraiser), the inability to view certain portions of the property, the inherent limitations of relying on information provided by others and limitations imposed by the time constraints of this engagement. There is also an economic constraint in that the monetary budget did not contain unlimited funds for examination, inspection and acquisition of additional data. Appraiser used the available resources in the collection, verification and analysis stages of this engagement in those areas that Appraiser considers most relevant to the purpose and intended use but, there is a significant possibility that Appraiser does not possess all information relative to the property.

Before relying on any statement made in this report interested parties should contact Appraiser for the exact extent of data collection and verification on any point they believe to be important to their decision making. This will enable such interested parties to determine whether they think the extent of data collection and verification were adequate for their individual needs or whether they would like to pursue additional data collection and verification for a higher level of certainty at an additional fee.

Information, including projection of income and expenses, provided by informed sources, such as government agencies, financial institutions, accountants, attorneys, Client and others is assumed to be true, correct and reliable. No responsibility for the accuracy of such information is assumed by Appraiser.

Any comparable sales data relied upon in the report is believed to be from reliable sources. It may have been impossible to examine all comparables due to monetary and time constraints. The value conclusions are subject to the accuracy of such information.

Engineering analyses of the property were neither provided for use nor made as a part of this engagement. Any representation as to the suitability of the property for uses suggested in this analysis is therefore based only on a rudimentary examination by Appraiser and the value conclusions are subject to such limitations.

All values shown in the report are projections based on Appraiser’s analysis as of the effective date of the appraisal. These values may not be valid in other time periods or as conditions change. Appraiser takes no responsibility for events, conditions or circumstances affecting the property’s value that take place subsequent to either the date of value noted in the report.

Since mathematical models and other projections are based on estimates and assumptions which are inherently subject to uncertainty and variation depending upon evolving events, Appraiser does not represent them as results that will actually be achieved. The primary assumption underlying the discounted cash flow method of the income approach is a reasonable probability of occurrence of events and conditions that are expected to occur that may have a bearing on the subject mining operation. The term ‘reasonable probability’ and similar wordings are not used in a strictly mathematical or statistical sense, but are intended to mean that the expected occurrences of events and conditions considered in an appraisal are appropriate and consistent with the purpose and intended use of the appraisal.

This report is an estimate of value based on an analysis of information known and available to Appraiser at the time of the engagement. Appraiser does not assume any responsibility for incorrect analysis because of incorrect or incomplete information. If new information of significance becomes available the value given in the report is subject to change without notice.

Opinions and estimates expressed in the report represent Appraiser’s best judgment but should not be construed as advice or recommendation to act. Any actions taken by Client or any others should be based on their own judgment and the decision process should consider many factors other than just the value estimate and information given in this report.

Appraisal is not a survey: It is assumed that the utilization of the land and improvements is within the boundaries of the property lines of the property described and there is no encroachment or trespass unless noted in the report.

No survey of the property has been made by Appraiser and no responsibility is assumed in connection with such matters. Any maps, plats, plans, sections or other drawings reproduced and included in the report are there only to assist readers with visualizing the property and are not necessarily to scale. The reliability of information contained on any such drawing is assumed by Appraiser and cannot be guaranteed to be correct. A qualified surveyor should be consulted if there is any concern on boundaries, setbacks, encroachments or other survey matters.

Discuss your mineral property appraisal, mining business valuation, or other mineral industry related concerns with Mineral Business Appraisal:
Michael R. Cartwright  michael@minval.com
Five Claret Court, Reno, NV  89512-4744
Tel/Fax: 775-322-9028

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