AG Armeno Exploration: Civil lawsuit against PT Pukuafu Indah and Jusuf Merukh

In respect to the Company's civil lawsuit against PT Pukuafu Indah ("PI") and its principal, Jusuf Merukh ("Merukh") in the District Court of South Jakarta, Indonesia, the Company has received from its Indonesian Counsel the written documentation of the formal verdict of the District Court of South Jakarta, Indonesia, the main points of which are the following:

1. Merukh's and PI's arguments have been rejected;

2. A declaration that the Attachment Order for certain properties owned by Merukh and PI that was carried out by the Bailiffs of the Central and South Jakarta District Courts to be legal and binding;

3. A declaration that Merukh and PI have breached their contract with the Company;

4. A declaration that the Letter of Agreement dated May 28, 1998, and the Amendment Agreement dated July 6, 1998 to be null and void,

5. PI and Merukh, either severally or jointly, within 8 days as of the day the subject Judgment becomes final and legally binding, have been sentenced to pay damages to the Company in the amount of US $167,280,000 (one hundred sixty-seven million and two hundred eighty thousand United States dollars), and,

6. Merukh's counter-claim has been rejected.

To date, the Company has not determined whether the subject Judgment has become final and legally binding. Even if it is in fact determined that the subject Judgment has become final and legally binding, this matter could be dragged on for a long period of time through the appeal processes that are available in Indonesia, the outcome of which is unpredictable. Furthermore, the enforceability in Indonesia of any final judgment that may be granted in favour of the Company might not be possible or effective. On behalf of the Board of, Ag Armeno Mines and Minerals Inc., "Bedo H. Kalpakian" (*)