John S. and Christobel D. Rendall - Page 9

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          remaining 160,000 pledged shares consisted of stock he purchased            
          at various times after 1980.                                                
          Merrill Lynch’s Sale of the Pledged Stock                                   
               On May 2, 1997, Merrill Lynch sent a letter to Mr. Rendall             
          demanding payment of the margin loan in the amount of                       
          $4,195,022.80, “plus all accrued interest”, by May 9, 1997.  If             
          Mr. Rendall failed to repay the margin loan by that date, Merrill           
          Lynch stated that it would liquidate sufficient shares of Solv-Ex           
          stock from the margin account to cover the margin debt.  The                
          letter further stated that, if $2 million were received by May 9,           
          the due date for the balance would be extended until May 16,                
          1997.                                                                       
               In ensuing correspondence between Merrill Lynch or counsel             
          for Merrill Lynch and Solv-Ex and/or counsel for Solv-Ex, counsel           
          for Solv-Ex disputed and counsel for Merrill Lynch defended                 
          Merrill Lynch’s right, under the Federal securities laws, to sell           
          the pledged stock.  In a letter dated May 22, 1997, Merrill Lynch           
          requested Solv-Ex and its transfer agent to register 1,100,000              
          shares of the pledged Solv-Ex stock for transfer in the name of             
          Merrill Lynch.  In a response to that letter and in a letter to             
          the transfer agent, both dated May 27, 1997, counsel for Solv-Ex            
          acknowledged that the requested reregistration/reissuance of                
          shares was accomplished by the transfer agent without permission            
          to do so from either Solv-Ex or counsel for Solv-Ex.                        






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