Eron Lenders
Project Name: South Thompson Guest Ranch
("STGR"or the "Property")
Lender update

08 October 1998

Further to our letter dated January 21, 1998 we are writing to provide you with an update as to the status of the above noted Property.

Project Status

As you are aware, STGR consists of a fifth mortgage on title with a face value amount of $3.5 million and a general security agreement covering the book debts. The mortgage is currently in default.

On June 22, 1998, David Patriquin, who holds the 3rd mortgage on STGR, proceeded with a foreclosure action. The Supreme Court of British Columbia (the "Court") granted Patriquin's motion with a redemption period expiring December 22, 1998. PricewaterhouseCoopers Inc. ("PWCI"), in its capacity as Judicial Trustee, requested conduct of sale of the Property. The Court subsequently granted PWCI conduct of sale on August 17, 1998.

In accordance with the Court Order, we have listed the Property with Royal LePage, a licensed real estate agency located in the Kamploopís area. Royal LePage has co-listed the property with Colliers International in Vancouver. Based on discussions with the real estate agents and from review of appraisals, the Property has been listed at $2,900,000.

There is currently approximately $2.4 million owing on the four mortgage in priority to our charge. Therefore based on the list price, some equity is possibly available for our 5th mortgage. We are still proceeding in our assessment of the validity and enforceability of all the prior charges.


Lender Communications

We will continue to communicate directly with all lenders and plan to issue another letter as soon as we have significant new information with respect to this project. In the meantime, if you have any specific questions or information concerning the project, please contact us in writing at 601 West Hastings Street, Vancouver, BC, V6B 5A5 or by fax at (604) 688-6128 marked to the attention of South Thompson Guest Ranch - Project Lead.


Yours truly

Judicial Trustee


PricewaterhouseCoopers is a Canadian member firm of PricewaterhouseCoopers International Limited, an English company limited by guarantee.


PricewaterhouseCoopers Inc.
601 West Hastings Street
Suite 1400
Vancouver, BC
Canada V6B 5A5
Telephone +1 (604) 682 4711
Facsimile +1 (604) 662 5300
Direct phone (604) 669-5087, Ext. 416
Direct fax (604) 688-6128





BACK