THE PRESIDENT OF SKYE RESOURCES / COMPAÑÍA GUATEMALTECA DE NÍQUEL, S.A., THE PRESIDENT OF THE REPUBLIC OF GUATEMALA & THE MINISTER OF ENERGY AND MINES

Dear Sirs:

We, the elected and appointed representatives of twenty Q‚eqchi‚ Mayan communities located in the township of El Estor in the department of Izabal and in the township of Panzós in the department of Alta Verapaz, gathered in El Estor on the day 7 B‚e of our Mayan calendar, August 12, 2005

DECLARE

a. In August 1965, the government of Guatemala granted to Exploraciones y Explotaciones Mineras de Izabal, EXMIBAL, a concession to mine nickel in an area of nearly 400 square kilometers, for a period of forty years. The mining project was abandoned by EXMIBAL in 1981, but in December 2004 the soon to expire concessions were returned to the government in exchange for new exploration mining licenses in the same area for a period of three years. Also, the Canadian owner of EXMIBAL changed the company‚s name to Compañía Guatemalteca de Níquel, CGN.

b. The granting of the new mining licenses was never consulted with our Q‚ eqchi‚ Mayan communities and in repeated occasions we have declared our rejection of the reactivation of open pit nickel mining in our territory. Therefore, we support the representation claim (see below) lodged with the International Labor Organization that charges that the new licenses were granted illegally thereby violating our rights guaranteed in Convention 169.

c. During the last six months we have dialogued with representatives of CGN in numerous meetings to explain our opposition to its exploration activities that endanger our crops and food security, our sources of water, our natural environment and our identity as Q‚eqchi‚ Mayans.

d. Despite an agreement with the company to support a project of land titling and registry in the area of the mining licenses where our communities are located, CGN continues to pressure the Las Nubes community to renounce its rights so that its lands can be explored by the company.

e. In the area of Cahaboncito in Alta Verapaz, without previous notice, CGN has repossessed lands that have been rented for decades by several communities, eliminating their chances to grow corn. Also, the exploration activities are already contaminating our rivers and creeks, harming our families for the lack of clean water.

f. The exploration activities already have caused an increase in deforested areas. In the past several days, massive fish and aquatic bird kills have been reported in Lake Izabal close to the company‚s plant.

THEREFORE, WE DEMAND

1. The immediate suspension of the illegally granted license and of all of CGN‚s mining exploration activity in the territory of the Q‚eqchi‚ Mayan communities affected by the mining project.

2. The repair of the damages caused by exploration activities, planting of trees and reintroduction of lost species, to be paid for by CGN. Also, the areas devastated by the previous mining project must be returned to their original natural state and given to Q‚eqchi‚ Mayan communities. The abandoned compounds should be granted to institutions or organizations committed to fostering education, health and community development in the region.

3. The company not to continue misleading, dividing and intimidating our communities.

4. The land titling and registry project be advanced in the communal lands in our townships; and in the meantime, the historical land boundaries established by the Q‚eqchi‚ Mayan communities be respected until final legal title is granted to them.

The document contains the signatures and seals of the communities of Nueva Sacarila, Rubelpec, Sarabia Chacalte Lote 2, La Caoba, Selich, Agua Caliente Lote 9, Chinamocooch, Las Nubes, Sacarila, Santo Domingo, Sechina Lote 15, Nueva Jerusalém, Río Sauce Sexán, Rubelhu, and Agua Caliente Lote 4 in El Estor; and Lagarto, Santa María, Quebrada Seca, Cahaboncito Lote 8, Caquiha Lote 7 and Taquinco Searanx in Panzós.

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ILO INVESTIGATES CLAIM CHARGING VIOLATION OF CONVENTION 169 REGARDING SKYE RESOURCES‚ GUATEMALAN NICKEL PROJECT

The International Labor Organization is currently investigating a claim filed in March 2005 charging that Guatemala‚s government violated its obligations under Convention 169 when it granted mine exploration licenses to Skye Resources‚ Guatemalan subsidiary in December 2004, in the northeastern part of the country largely populated by Q‚eqchi‚ Mayan indigenous communities.

The claim, formally called a representation, was filed under Article 24 of the ILO Constitution by the Federación de Trabajadores del Campo y de la Ciudad, FTCC, a Guatemalan farm workers‚ union, along with its local partner, the Defensoría Q‚eqchi‚. It charges that when the Guatemalan Ministry of Energy and Mines granted the mining company new exploration licenses for an area of approximately 260 square kilometers, populated by nineteen communities with a population of about 6,000 indigenous people, it „failed to adopt measures to safeguard the integrity of the Q‚eqchi‚ Mayan people.‰

The representation continues: „For the Q‚eqchi‚ Mayans, as with other indigenous peoples, their territory is a fundamental element for their survival, not only as individuals, but also as a people with its own characteristics. Further, for the Q‚eqchi‚ Mayans, the extraction of any component of its territory that is not subject to the rules and customs of their culture, affects their world reality and as such, their cultural integrity as a people.‰

Among the failings of the Guatemalan government cited in the claim is that the communities‚ expressed wishes that the project not be developed were ignored and that transparent mechanisms for previous and informed consultation about the project were never established or undertaken.

CGN, Skye‚s Guatemalan subsidiary, is presently engaged in exploratory drilling activities in areas they own that are adjacent to lands adjudicated to indigenous communities. However, due to concerns about deforestation, water contamination and violation of their land rights, the communities are opposed to the work‚s continuance, even on Skye‚s own property. In a declaration signed by twenty communities August 12, representatives call on Guatemala‚s president and mining minister to suspend immediately the mining license and Skye‚s exploration activities. There are further social and environmental concerns as Skye attempts to resurrect the long abandoned EXMIBAL nickel project they bought from Inco Limited in December 2004 and have christened the „Phoenix Project‰.

To date, the company has met with community resistance and has had to temporarily suspend and relocate some of its activities. The Defensoría Q‚ eqchi‚ and FTCC are hopeful of a ruling by the ILO that will be critical of Guatemala‚s practice of granting mining licenses in the territories of its indigenous communities without prior and informed consent by the affected populations.