During the quarter, the Peruvian Tax authorities unilaterally applied the sales taxes receivable withheld against the claimed amount including interest and penalties which are still pending at the Peruvian Judicial Tribunal. Any amounts that may be required to be paid for these contingencies could have a negative impact on the Company and may require additional sources of financing, though management is vigorously contesting all of these claims.

The legal and judicial systems of Peru are significantly different from the Canadian system.

 Is is possible there is more to the story than even management knows or is willing to admit concerning the permits and is it possible the government is playing hardball ? The government has been awarded a considerable amount of cash and if DNG is hiding behind a subsidiary to avoid payment then we must take this into account when wondering why we still have no permits. This is not a dead issue and I am pleased the board is chatting on this. Now all we need is a Peruvian lawyer. KPMG may be right, but the Peruvian government can still step in and decided not to play by the rules. Remember its Peru not Canada ! Find a way to pay I say, shortcuts eventually become deep cuts.