23811 Washington Ave. C-110 #241 Murrieta, CA 92562 May 16, 2012

Mr. Sam Samuel Mr. Erick Hall C/O Alpha & Omega Dev. LLC (AOD)

Re: Redevelopment of the Former Halaco Refinery Site, 6210 Perkins

Road and the adjacent “Slag” Pile, 6200 Perkins Road, Oxnard (Ottoman Beach Area)

Dear Sirs:

Clean Soil, Inc. (CSI) is pleased to present this evaluation of the proposed redevelopment of the above-mentioned properties. These sites are unique because the slag pile (the “Pile”) contains 650,000 (or more) tons of metals in it. The goal of this letter is to document the quantity of recoverable metals in the Pile and their cash value relative to today’s current spot market prices. In addition, CSI documents the demand for these metals by citing how they are used in the production of various products. PROJECT OVERVIEW The plans are to build 1,260 units in 6 structures on the two sites. The project costs are summarized in the Table below. Total Project Area Owned 27 Acres Total Project Area To Purchase 13 Acres – Approx. USD $10,000,000 Employment Generation 200 jobs (Phase 1) Mining Project Development 16 months (Phase 1) Phase 1 Investment needed Approximately USD $25,000,000

Phase 1 Site Preparation Total $35,000,000 Employment Generation 1,400 jobs (Phase 2) Project Development 36 months (Phase 2) Phase 2 Hotel Resort Investment Total USD $215,000,000

Project Total USD $250,000,000 The encouraging and unique aspect of this undertaking is that the estimated value of the metals in the Pile far exceeds the estimated cost of the entire project. RECOVERABLE METALS CSI has analyzed the data available from the USEPA and from private assays and crafted a Table (below).

23811 Washington Ave. C-110 #241 Murrieta, CA 92562

On the Table, CSI has calculated and listed the number of pounds of the eighteen most valuable and recoverable metals in the Pile, the current spot market price for each metal, and the calculated cash value of each metal. Even though members of the precious metals group (PMG, e.g., gold, silver, platinum, and palladium) have relatively low concentration levels in the pile, they are included because of their high value and the large volume of material in the pile. Of the base metals listed on the Table, iron is by far the most abundant. Iron, nickel, and cobalt are all listed on the Table because of their ease of recovery. Beryllium, titanium, and vanadium are in demand and relatively abundant. Copper and zinc are abundant and are the most marketable metals on the list. Lead and manganese are useful marketable base metals. The PMG group has a high spot market value. USES OF LISTED METALS Beryllium is used in aerospace structural materials, in nuclear reactors, in electrical contacts, and as a copper alloy in springs. Titanium is used as a strong light-weight alloy in aircraft, ships, spacecraft, and missiles. Copper is used in electrical applications as a conductor of electricity and heat, in alloys such as brass and bronze, and in almost all coins. Manganese is used almost exclusively in the production of iron and steel. Zinc is

23811 Washington Ave. C-110 #241 Murrieta, CA 92562 used in the galvanization of steel, the die-casting of machine parts, in batteries, paints, pharmaceuticals, and cosmetics. Nickel is a high-temperature metal in alloys and in corrosion-resistant surfaces, in batteries and coins, and in electroplating. Iron is used in numerous alloys, in steel in automobiles, ships, and buildings, and as an oxide in computers. Vanadium is usually alloyed to steel, used in nuclear applications, and high-temperature service. Lead is used as a shield against radiation and is a poor electrical conductor. Cobalt is a super magnetic alloy and is used in chemical compounds, diamond tools, paints, glass, and ceramics (for the blue color). Silver is a precious metal used in electronics, coins, and photography. CONCLUSIONS The concentration levels of the various metals has been established by the USEPA Region 9 (Weston Solutions, Inc. 2007, Integrated Assessment, Halaco Engineering Company, Oxnard, California, Ventura County) and corroborated by assays completed by CSI on behalf of AOD. The USEPA has also determined that 2,000,000 tons of slag may be present in the Pile (ibid). By combining these USEPA data with current spot market prices, the value of each metal in the Pile has been calculated. The combined value of all the recoverable metals in the Pile exceeds $1 billion (EPA estimate) or $2 billion (CSI estimate). Beryllium and titanium have the highest estimated recoverable value of the base metals in the Pile (over $300 million each). The Table is based upon 1 million tons (a conservative estimate) so that the actual value of metals in the Pile may be double! The metals present in the Pile have value in industry and are easily brokered. The recovery of metals from the Pile will not only exceed the cost of recovery, but will serve to render the remaining soil “inert”. Whatever remains in the Pile material after metal recovery will be at concentration far below regulatory standards. The site will then be suitable for construction. Sincerely,

Mark H. Slatten, PhD, PG/CEG, CHG/PGg Principal Scientist/Project Manager

23811 Washington Ave. C-110 #241 Murrieta, CA 92562

CURRICULUM VITAE for

Mark H. Slatten, Ph.D., CEG, CHG, PG, PGgeophysics

23811 Washington Avenue C-110 #241, Murrieta, CA 92562 951-970-6955 (cell)

Professional Experience

Mr. Slatten has 32 years experience as a geologist, geophysicist, engineering geologist, and hydrogeologist. He has extensive experience managing over 1,200 projects, including water quality assessment, groundwater basin and aquifer modeling, and groundwater monitoring well installation, monitoring, sample collection, and data interpretation at military installations, government facilities, refineries, landfills, and industrial sites, among others. These job functions require a comprehensive understanding of the multidisciplinary tasks he uses to characterize the difficult sites that he has been charged with investigating.

Representative project experience includes 22 years of environmental site investigations and remediation:

1978-1987: Exploration geologist/geophysicist Exxon Co. USA, Houston, TX. 1987-1988: North San Bernardino – Mr. Slatten was the zone contractor for the

DHS (Department of Health Services) on local Superfund sites, including San Bernardino and the Redlands Superfund site. He was responsible for the installation of deep (500’-deep) piezometers, one of which was in a schoolyard. This site was a public relations nightmare because the local water supply wells had to be shut down due to contamination by PCE. Mr. Slatten participated in public meetings at the town hall to calm the public down.

1989: Confidential client – At an abandoned gasoline service station site, Mr.

Slatten studied the complex geology of several apparent aquifers beneath the site that made the prediction of the direction of contaminant transport difficult. Many wells already existed on-site, however several were constructed poorly and resulted in cross-contamination of aquifers. He recommended the abandonment of several wells, studied boring logs, and made sense of the geology of the water-bearing zones. Mr. Slatten predicted a groundwater flow direction and gradient and recommended that no more wells be installed.

23811 Washington Ave. C-110 #241 Murrieta, CA 92562

1990-1991: Plating shop – Mr. Slatten directed an extensive Phase 2 site investigation of an historic plating facility in a highly industrialized part of a large metropolitan area. Concrete holding tanks had been breached and a large volume of process water with a very low pH had entered the vadose zone and impacted perched groundwater aquifers beneath the site. Metals in high concentrations were detected in the soil and the groundwater both on- and off-site. A major problem with identifying the areal extent of the contaminated groundwater “plume” was the fact that there were several commingled groundwater “plumes” present beneath the area, including those of regional extent. Through an extensive modeling effort, the extent of the plating shop’s impact to groundwater was delineated.

1992-1993; 1997-1998; 2004-2006: Stringfellow – Mr. Slatten participated in the investigation of this Superfund site in two different capacities (and times). In the early 1990’s, he was on a crew that installed off-site groundwater monitoring wells in the housing tract west (below) this notorious site. This involved much public relations effort because some of the wells were drilled in backyards and in streets. Much later (2004-2006), Mr. Slatten was involved in the collection of 3D seismic data to determine the pattern of joints that create much of the porosity beneath the site. Locations that were selected resulted in much better water extraction and enhanced the cleanup effort.

1994-1995: Zone contractor for Cal Trans locating USTs and collecting 10,000

soil samples for lead analysis along So Cal freeways in preparation for sound wall construction.

1996: Confidential client – Mr. Slatten coordinated the geophysical and soils

testing of 26 oilfield properties for a major oil company that was selling off its production assets. This effort required comprehensive understanding of the multidisciplinary tasks required to complete the Task, including, but not limited to, borehole clearances prior to drilling, the collection of soil vapor samples from 5 feet below the ground surface, the collection of soil and groundwater samples, the packaging and transportation of the samples to the lab, and the interpretation of the analytical results. The surprising result was that the properties were, by and large, free of hydrocarbon-impacted soil and groundwater.

1999-2000: Truck-Wash – Mr. Slatten was retained by a confidential client to

determine the most cost-effective technology to remediate solvent-contaminated groundwater from a deep aquifer beneath this site. After extensive drilling and sampling, CPT pushes, and geophysical surveys, Mr. Slatten determined that buried electrodes that heated up the subsurface to 200°F, in combination with

23811 Washington Ave. C-110 #241 Murrieta, CA 92562

SVE, was the most logical and most cost effective method of complete remediation.

2001: In 1932 the City of Long Beach created an unlicensed landfill to dispose of

debris from the extensive earthquake damage it had incurred. The U. S Army Air Corps then used this same landfill during World War II as an open burn site. Finally, in 1962 a plating facility was built on top of this landfill and had numerous spills and releases into the overlying soils and buried landfill material. Mr. Slatten was retained by the facility’s insurance carrier to characterize the site, determine the extent and chemical characteristic of the landfill, and identify which parties are responsible for the hazardous waste materials in the landfill and in the groundwater. Heavy metals, including lead and zinc, were the principal contaminants. Mr. Slatten was responsible for the complex groundwater modeling phase of this project. Through Mr. Slatten’s modeling efforts it was shown that selected constituents started impacting groundwater in the early 1940s and continues to cause degradation of groundwater quality today. Litigation on this matter is currently ongoing.

2002-2003: A confidential municipal client retained Mr. Slatten to assess the

impacts of perchlorates to its municipal water wells and to determine the sources of this contaminant. To date, the client has been forced to shut down three of its eight drinking water supply wells. The project involved analysis of historical groundwater records dating back to the 1940s. Through his efforts, Mr. Slatten estimated the groundwater velocities and direction of contaminant movement throughout a heavily-faulted area covering 14 square miles. From this information, the parties responsible for improper disposal of materials containing perchlorates were identified.

2004-2005: Conducted a test of roofing tiles in a 600,000 yard pile to

establish whether the tiles presented an environmental hazard. Mr. Slatten ground up tiles into 2-minus and constructed three pyramids of different heights. The piles were built around wells that enabled him to test the production of leachate. The leachate was produced by wetting the piles to simulate rainfall. The results showed that the tiles were inert, saving Vulcan Materials millions of dollars in shipping fees. The tiles were used to reclaim pits and returned the pits to pre-excavation status.

2007-2009: Conducted RI/FS for a former chemical repackaging facility.

Collects groundwater samples for quarterly monitoring. Mr. Slatten has developed a plan for offsite investigation that is currently under review by the DTSC.

23811 Washington Ave. C-110 #241 Murrieta, CA 92562

2009: Mr. Slatten oversaw the remediation of a landfill in which slag from a steel mill was deposited over an eleven-year period. This required the sieving of the landfill material to remove slag and trash, which were then shipped offsite. The native soil had to be tested and a backfill engineered to rough grade. A clean closure is being sought.

Current Employer September 2007 to present. Owner and chief scientist of Clean Soils, Inc. Mr. Slatten conducts and completes investigations and cleanups of Brownfields, and maintains a stable of clients in the process of converting environmentally-challenged commercial properties into residential subdivisions. Education & Certifications California Registered Geologist (RG #4351) California Certified Engineering Geologist (CEG #1605) California Registered Geophysicist (RGP #932) California Certified Hydrogeologist (CHG #521) California Registered Environmental Assessor I (REA #1111) California Registered Environmental Assessor II (REA II #20153) Arizona Registered Geologist (#25803) Alaska Registered Geologist (#287) Illinois Registered Geologist (196.001295) Indiana Professional Geologist (#2316) Nevada Certified Environmental Manager (CEM #1575) Washington Registered Geologist (#2782) B.S. Geology, University of California, Riverside, 1976 M. S. Geology, University of California, Riverside, 1978 Ph.D. Project Management, North Central University, Prescott, Arizona - pending

23811 Washington Ave. C-110 #241 Murrieta, CA 92562 Academic and Professional Honors 1972 Research Society of America (RESA) Award for Promise in Original Research 1999 State Board of Registration for Geologists and Geophysicists, Selection

Committee Member to evaluate registration exam questions for prospective geophysicists.

2009 State Board of Registration for Geologists and Geophysicists, Selection Committee Member to grade registration exams for prospective engineering geologists.

2009 State Board of Registration for Geologists and Geophysicists, Selection Committee Member to grade registration exams for prospective professional geologists.