Chaco Resources SAG Meeting

A group of four shareholders were extended the courtesy of a meeting with the company's new advisors, Blue Oar Securities PLC. The meeting took place at their premises in London EC2 on Tuesday 7 May 2007.

The purpose of the meeting was to collectively put forward, on behalf of private investors/shareholders, a number of key concerns all, it seems, contributing to negative sentiment.

We wanted to make it clear to them that as a single unit we represented, without any effort, almost 15% of the shareholding and make them aware that we existed and could stand up and be counted should it be necessary in the future. More specifically, we wanted to discuss some concerns about the level of communication of late, discuss the recent arrival (and departure) of various Board Members (including Corporate Governance issues) and obtain a better understanding of the short and longer term strategy.

The representatives from Blue Oar afforded us every courtesy and responded as best they could to our concerns. They confirmed that the points we raised would be conveyed to the Chairman, Giles Clarke.

I am slightly limited as to what I can disseminate here as we were given sight of their recently completed Company Report that was intended for their Institutional Clients. It was used purely as a discussion tool during the meeting and it was agreed that this would not be forwarded to any third party or discussed on bulletin boards.

The Shareholders group have to honour this if we stand a chance of retaining credibility or meeting with Chaco's representatives, or the Company, again in the future.

It was felt by our group that the meeting went very well and all came away with a sense of optimism.

Needless to say, should some of our concerns not be addressed, they will be put forward in much stronger terms at the next AGM, where the Chairman will not be able to hide behind others.

The Alea prospect is now becoming interesting. It is clearly the Company's priority in the short term and there is much hope that the proven reserves can realise the anticipated quantities to make it a profitable play. It is my understanding also that the civil works needed to access the drilling site is well on the way to completion so we may be see some useful communication from the Company in due course.

Finally, should any existing shareholder, certified or beneficial, wish to join the group and make our position even stronger, please do not hesitate to email the coordinator Stewart at simstew@btinternet.com with your name and shareholding.

Beau - Gareth