United States Department of the Interior
                            BUREAU OF LAND MANAGEMENT
                             Cedar City Field Office
                            176 East DL Sargent Drive
                             Cedar City, Utah 84720


In Reply Refer To:
UT-040
3809: UTU-68596
                                                      May 16, 2000

Mr. Dennis S. Engh, President
Utah Clay Technologies
3985 S 2000 E
Salt Lake City, Utah 84124

Dear Mr. Engh:

This letter acknowledges receipt of your notice of intent, received in this
office on May 8, 2000, to amend existing notice UTU-68596, the White Mountain
Kaolin Prospect, located 2 miles west of White Mountain. The area to be
disturbed is located within portions of the SW1/4NE1/4SE1/4 of section 8, T. 29
S., R. 13 W., Beaver County, Utah. The notice proposes changing the site status
from mineral exploration to small mine operations and expanding site disturbance
up to the 5-acre limit. Mining will be performed by bulldozer ripping of
naturally occurring outcrops of kaolinite, loading of broken kaolinite into haul
trucks, and trucking via existing access roads for off-site processing. The
pre-existing access road, which is about two miles in length and connects the
site with County-maintained roads, will be graded and repaired periodically but
not substantially improved or widened.

The notice has been reviewed for compliance with regulations found at 43 CFR
3809 and possible conflicts with cultural resources, threatened or endangered (T
& E) plants and animals, and land status. No conflicts were identified and the
notice is in compliance with federal regulations. The notice has been accepted
under file number UTU-68596. Please use this number in all future correspondence
with this office.

A copy of the information provided in your notice has been forwarded to the Utah
Division of Oil, Gas, and Mining (DOGM). DOGM has requested that we remind all
operators that until the necessary permit fees have been received by their
agency, they do not consider the work approved for start-up.

Surface management regulations (43 CFR 3809) require reclamation of all
disturbed public land and that reasonable measures be taken to prevent
unnecessary or undue degradation of the land. The operating practices and
reclamation standards that are attached apply to the disturbances to be made
under this notice. If your operations extend for more than a year, please advise
us of the status of your mining or exploration activities on the anniversary of
your notice.


Visit our webslte at http://www.blm.gov/utah for Information about Current Utah
BLM environmental document

                                                                    Exhibit 10.7
                                                               Page 1 of 4 Pages
<PAGE>


As a reminder, your Blawn Wash kaolin prospect (BLM case file UTU-76365 and DOGM
file # E/001/035), has remained disturbed and inactive in excess of the period
allowed by BLM regulations and DOGM regulations for exploration activity. It
will be necessary to either amend the notice to convert the site status to a
small mining operation, or to initiate site reclamation.

If you have any questions, feel free to call me at (435) 865-3040.

Sincerely,

/s/ Ed Ginouves

Ed Ginouves
Mining Engineer












xc: Tom Munson, DOGM - with copy of notice UTU-68596, CCFO SOP's & RS







Visit our webslte at http://lwww.blm.gov/utah for Information about current Utah
BLM environmental documents

                                                                    Exhibit 10.7
                                                               Page 2 of 4 Pages
<PAGE>


State of Utah
DEPARTMENT OF NATURAL RESOURCES
DIVISION OF OIL, GAS AND MINING

1594 West North Temple, Suite 1210
PO Box 145801
Salt Lake City, Utah 84114-5801
801-538-5340
801-359-3940 (Fax)
801-538-7233 (TDD)

Michael O. Leavitt, Governor
Kathleen Clarke, Executive Director
Lowell P. Braxton, Division Director

                                  May 12, 2000



Dennis Engh
Utah Clay Technology
3985 South 2000 East
Salt Lake City, Utah 84124

Re:  Acceptance of Notice of Intention to Commence Small Mining Operations, Utah
     Clay Technology, White Mountain Project, S/001/052/Beaver County, Utah

Dear Mr. Engh:

     Thank you for your Notice of Intention to Commence Small Mining Operations
and initial permit application fee received by the Division on May 3, 2000. The
application for the proposed White Mountain Project, located in the N1/2 of the
NW1/4 of Section 8, T29S, R13W, SLBM, Beaver County, Utah, is complete and no
additional information is required at this time. This small mining project is in
the same vicinity as Utah Clay Technology's Blue and Julie White exploration
project, file E/001/054. Your notice stated that previously mined areas will be
included in this notice. Therefore, this notice will supercede the exploration
notice and that file (E/001/054) will be closed and retired.

     The Utah Mined Land Reclamation Act of 1975 [40-8-7(1)] provides the
authority for fee implementation which was approved by the Utah Legislature at
its 1998 session. Commencing July 1, 1998, the fees are assessed to new and
existing notices of intention, and annually thereafter. Small Mining Notices
require a $100.00 annual fee. The permit fee was paid for the 1999 fiscal year
for the Blue and Julie White exploration project; therefore, that fee payment
will be transferred to this small mining record. It is policy that any payment
received within 45 days of our next fiscal year will be credited toward that
year. Because we are now within that 45 day period, your check submitted with
this notice will be credited towards your 2000 fiscal year payment. If, in
error, you receive another billing statement in July for this project, please
contact Joelle Burns at (801) 538-5291 so she can make the correction.

     For your reference, I have enclosed copies of our summarized rules
regarding "Operation and Reclamation Practices," and the statutory penalty for
failure to reclaim a minesite (SMO-1). Please give special consideration to item
#10 of the "Operation and Reclamation Practices. Stockpiling topsoil material
prior to beginning your mining operation will help ensure successful
revegetation efforts upon final reclamation of the minesite. If the area being
mined is a solid rock outcrop, or if the land surface is very rocky, then soil
stockpiling is probably not possible. However, even the first few inches of
undeveloped material is worth saving to aid in later revegetation efforts, and
future regulatory release from reclamation requirements.

                                                                    Exhibit 10.7
                                                               Page 3 of 4 Pages
<PAGE>


Page 2
Dennis Eng
S/001/052
May 23, 2000


     Should you wish to expand your operation beyond the five (5) acre
limitation, please notify this office as soon as possible to discuss the
necessary permitting requirements. Approval of a large mining notice could take
from six to twelve months or longer.

     Approval of mineral exploration or mining operations by the Division of
Oil, Gas and Mining does not constitute approval to commence operations upon
federal lands managed by the Bureau of Land Management (BLM). Before conducting
mining operations on these lands, the operator must provide written
notification, meet bonding requirements, and obtain written approval from the
BLM. Please contact Ed Ginouves of the Cedar City Field Office regarding the
BLM's requirements.

     Thank you for your cooperation. When in the area, a member of the Division
staff will examine the site. Best wishes with your mining operation.

                                   Sincerely,


                                 /s/ Tom Munson

                                 Tom Munson
                                 Senior Reclamation Specialist

jb
Enclosure
cc:      Ed Ginouves, BLM, Cedar City FO
         File E/001/054
         Tracking File
S01-52-noi

                                                                    Exhibit 10.7
                                                               Page 4 of 4 Pages