BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

February 11, 2008

MINERAL PROPERTY INTERESTS

Title to mineral property interests involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral property interests. The Company has investigated title to its mineral property interests and, to the best of its knowledge, title to the mineral property interests are in good standing.

In October 2004, the Company granted to Ivanhoe Mines Ltd. ("Ivanhoe") the right to earn, over an eight-year period, a participating interest in a certain portion of its Lookout Hill Property (the "Project Property"). Under the agreement, Ivanhoe must spend a minimum of $3 million in order to earn surface rights in the Project Property and a minimum of $20 million in order to earn any mineral rights interest in the project. Thereafter, the Company has the right to require Ivanhoe to fund its share of subsequent project costs through to production, to be recovered from production cash flow. The agreement with Ivanhoe also provides for Ivanhoe to subscribe for 4,600,000 units of the Company at a price of C$1.00 per unit (completed in November 2004). In October 2007, the Company has received notice from Ivanhoe that it has incurred the required expenditures (US$20 million), giving it the right to form a 51%-49% joint venture. Ivanhoe has indicated to the Company that it will not be forming a joint venture at this time, but will continue to spend to earn a higher percentage interest.

This recommendation is only valid for today while the Mongolian crisis lasts and while the price of gold is around $900 or higher.

There is no doubt that the election of Sen. Hillary Clinton is a strong plus.

Let us now look at the world EGI is currently deposited. We have the Chinese, Aluminum Corp. of China, Alcoa, BHP, Rio, Ivanhoe—EGI. One very important positive about EGI is that nobody has ever said anything derogatory about the Company, to our knowledge.

However, and I am quoting from the daily papers, we are there. We represent a company, a stock, a piece of land. The first assets we have that nobody has ever said anything derogatory of EGI.

In the midst of the greatest financial turmoil among mineral companies, EGI is often mentioned for the simple reason that "we are there." Not only "we are there," "we are unique."

What is the good story?  Is there a story?

We have less than 100 million shares, the market cap of 200 million, a piece of land in a faraway country whose value carries some magic numbers, some other exploration projects, a solid board, $68 million cash, and commendable staff with vast experience in mining.

We have a vice chairman whose country once ruled the seas (quote from Gen. de Gaulle, June 14, 1940).

In the midst of this international fight for assets nobody bid for EGI but nobody knocked EGI.

Let's start with the latter event, since it'll easily be more important to the two companies' respective futures. Hours before an effective paint-or-get-off-the ladder deadline, BHP offered 3.4 of its share for every one of Rio Tinto's. That's up from an earlier three-for-one proposal and was worth more than $147 billion, based on BHP's Monday's closing price.

According to a colleague, Phillip Gotthelf, the author of precious metal trading, the torch has been passed from those who believe that gold as a metal will hit $1,000 but inevitably march $2,000 as a monetary currency.

In the next 15 years, where the majority of the board members of EGI will still be around, one will see as many different gold-related investment vehicles as one sees today in mortgaged-backed securities, CDOs, sub-prime and other collapsing mortgage-backed securities.

I was 7 years old when I learned to respect my father, an attorney in Budapest, 60-years-old in 1945, when he was active on the Black Market in the daily business of Swiss franc and gold. I learned early, in gold we trust.

The sub-prime crisis accelerated among investors and traders. Barrick Gold and U.S. gold are here to stay, but the Florida condos will be passed from domestic to international ownership at a 50% discount.

Actually, when the government of the United States, when the treasury understands the difference between sub-prime and gold, gold will march inevitably to the $2,000 mark.

1. Yes, Mr. Crowe, there is going to be a gold index market.
   
   
2. When your stock is $2.00 you can form a unit priced at $2.50 consisting of stock and a warrant exercisable at $2.75, and package it in such a way that the exercise price of the stock and the warrant will drop 5 cents whenever gold goes up $5.00. We can start with the $900 gold price.
   
   
3. Obviously we have to draw a line and the regression analysis stops when the exercise price drops to $2.00. We take it for granted that if gold goes to $950 per ounce, the value of the stock would go to $2.50; therefore the profit potential for the unit holder will be there. This is only a concept. The numbers can be changed.
   
   
4. We should raise with such gold-backed bonds $100 million.
   
   
5. Look at the pro forma picture. Entrée Gold will own a valuable piece of real estate in Mongolia whose value goes up every day with the price of gold and sooner or later Neville Chamberlain will not be able to say that Entrée's real estate in the Ivanhoe Group is a piece of real estate about which we know nothing.