EXHIBIT 99.1

                            COMMERCE GROUP CORP.
                             6001 NORTH 91ST ST.
                          MILWAUKEE, WI  53225-1795
                       414-462-5310 . FAX 414-462-5312
                      E-MAIL info@commercegroupcorp.com
                      WEBSITE www.commercegroupcorp.com

AND/OR COMMERCE/SANSEB JOINT VENTURE (Joint Venture)
AND/OR HOMESPAN REALTY CO., INC. (Homespan)
AND/OR ECOMM GROUP INC. (Ecomm)
AND/OR SAN LUIS ESTATES, INC. (SLE)
AND/OR SAN SEBASTIAN GOLD MINES, INC. (Sanseb)
AND/OR UNIVERSAL DEVELOPERS, INC. (UDI)
ALL LOCATED AT THE SAME ADDRESS

May 9, 2005


Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
6001 North 91st Street
Milwaukee, Wisconsin  53225

Dear Mrs. Machulak:

At today's Commerce Group Corp. (Commerce) Directors' meeting, the
Directors were informed about the annual confirmation, disclosure and
status letter that you requested from Commerce and its affiliates to
establish and confirm the amount due and the collateral pledged along
with any other Commerce obligations or agreements made to General Lumber
& Supply Co., Inc. (GLSCO and/or Lender)  as of Commerce's fiscal year
ended March 31, 2005.  Today, Commerce's Directors, by unanimous consent,
approved, ratified and confirmed the contents of this letter and
authorized me to submit its understanding of your status with Commerce,
which is as follows:

1.  Promissory Notes and Other Obligations

    a.  An open-ended, secured, on-demand promissory note no. 3 which was
        originally issued to GLSCO on December 31, 1981 in the sum of
        $16,836.37 and has been open-ended since that date and is to
        include all future advances, services, charges and interest on a
        monthly basis.  Pursuant to Commerce's Directors' approval on
        October 1, 1990, the interest rate on this note was increased to
        a rate of 4% over the prime rate base established by the First
        National Bank of Chicago, Chicago, Illinois.  Beginning with
        April 1, 1994, the interest rate is 4% over the prime rate base
        established by the First National Bank of Chicago, Chicago,
        Illinois, (then Bank One; now the prime rate published in the
        Wall Street Journal), but not less than 16% per annum.  The
        interest is payable monthly and the total amount due to GLSCO on
        this promissory note as of March 31, 2005 is $1,659,754.49.
        (Schedule of Principal and Interest as of March 31, 2005, Exhibit
        A)

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 2 of 13 Pages

        Commerce is no longer issuing monthly Notes for the payment of
        interest, etc., but pursuant to our understanding, Commerce is
        augmenting all additions and advances made by GLSCO, and it will
        deduct any payments or credits made by Commerce to the current
        open-ended, secured, on-demand, outstanding Notes issued or
        obligations owed to GLSCO.

        However, on this date, Commerce's Directors have authorized its
        Officers to issue renewed annual note(s) (Exhibit B) so that the
        Lender will have a current substituted dated debt instrument.
        The Directors acknowledged that the issuance of note(s) for each
        transaction are too cumbersome and are not practicable to manage.
        Also, the length of time involved and the number of transactions
        make it impractical to devote the time and effort to issue a note
        for each transaction.  Therefore, the Directors have unanimously
        agreed to the following resolution, which was adopted on May 9,
        2005:

             WHEREAS, in the past 20 years or more the following parties:
        General Lumber & Supply Co., Inc. (GLSCO); Edward L. Machulak  as
        an individual and not as a Director or Officer of Commerce (ELM);
        the Edward L. Machulak Rollover Individual Retirement Account
        (ELM RIRA), the Sylvia Machulak Rollover Individual Retirement
        Account (SM RIRA), and Sylvia Machulak, as a consultant and as an
        individual (SM), hereafter collectively and individually
        identified as the Lender(s), have accounted for advancing cash
        funds, earning accrued interest, and for appropriate credit which
        was reconciled to the open-ended, secured, on-demand notes(s);
        and

             WHEREAS, the Directors desire to minimize the record keeping
        in these transactions without jeopardizing, diminishing,
        altering, changing or losing any rights that the Lenders have by
        changing the procedures in handling the recording of any notes(s)
        issued or to be issued; and

             WHEREAS, in order to provide an easier accounting facility
        by renewing the notes(s) on an annual basis to coincide with the
        Company's fiscal year (which presently ends on March 31) and to
        incorporate said renewed note(s) with the annual confirmation
        agreement(s); and

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 3 of 13 Pages



             WHEREAS, prior to the change to issue substituted renewed
        note(s), the initial promissory note(s) were considered to be
        open-ended, secured, on-demand and the additions and deductions
        were recognized by separate accounting records; therefore, be it

                  RESOLVED, That the Directors authorize and empower the
             Officers to substitute and issue renewed consolidated
             promissory note(s) at the end of each fiscal year beginning
             with the Company's fiscal year ended March 31, 2005 to the
             following: General Lumber & Supply Co., Inc. (GLSCO); Edward
             L. Machulak  as an individual and not as a Director or
             Officer of Commerce (ELM); the Edward L.  Machulak Rollover
             Individual Retirement Account (ELM RIRA), the Sylvia
             Machulak Rollover Individual Retirement Account (SM RIRA),
             and Sylvia Machulak, as a consultant and as an individual
             (SM), hereafter collectively and individually identified as
             the Lender(s); and

                  BE IT FURTHER RESOLVED, That the Officers of the
             Company are authorized and empowered to assure the Lender(s)
             that by substituting and consolidating the existing note(s)
             and issuing the renewed note(s) on the last day of the
             Company's fiscal year beginning with March 31, 2005 with the
             understanding that the intention is that the Lender(s) will
             not jeopardize, lose, diminish, risk, alter or change any
             rights, including the pledge of collateral, that are
             inherent with the initial note(s) by the issuance of annual
             renewed open-ended, secured, on-demand promissory note(s);
             and

                  BE IT FURTHER RESOLVED, That the Directors acknowledge
             that the only purpose of the change and substitution to
             issue annual renewed notes(s) is for the convenience,
             reduced accounting and reducing the paperwork involved; and

                  BE IT FURTHER RESOVED, That the Officers are authorized
             and empowered to perform any act that they deem necessary to
             accommodate the purpose of issuing annual renewed note(s).

    b.  Commerce leased approximately 3,100 square feet on a
        month-to-month basis for its corporate headquarter's office; the
        monthly rental charge was $2,145 since October 1, 1992.  As of
        December 1, 1995, Commerce increased the space it rents to 4,032
        square feet, and the monthly rental charge was increased

<PAGE>
Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 4 of 13 Pages


        to $2,789.  All other terms and conditions of the Amended October
        1, 1992 Lease Agreement remain the same.  (Reference is made to
        Exhibit B, December 1, 1995 Amended Lease Agreement, included in
        April 5, 1996 confirmation letter.) (Reference is made to Exhibit
        B, Lease Agreement, included in April 12, 1993 confirmation
        letter.)

    c.  Commerce also acknowledges that it purchases on an open account
        from GLSCO from time to time materials, supplies etc. that it
        needs for itself or for the Joint Venture.  Some of the purchases
        are made through GLSCO because Commerce does not have the credit
        availability from the various sellers of goods, merchandise, etc.
        that is required by it or the Joint Venture.  The amount due from
        time to time varies.  As of March 31, 2005, there is nothing due
        on this open account.

    d.  GLSCO from time to time has canceled part of its debt by the
        purchase of restricted Commerce common shares based on a price
        determined by the Directors or at a price sold to third party
        purchasers at an arms-length transaction.  There were no
        transactions consummated during this fiscal year.

    e.  In order to provide continuity and to make an orderly transition
        of the Standing Rock Campground (SRC) operations, the parties
        agreed that Commerce would operate the SRC until such time that
        GLSCO would terminate this agreement.

        Commerce retained the profits earned from the SRC operations and
        the following describes the transactions that took place:

Fiscal year end                Revenues      Expenses      Profit
March 31, 2002               $ 73,364.97    $40,202.17   $33,162.80
March 31, 2003                 68,304.07     41,009.24    27,294.83
                             -----------    ----------   ----------
  Balances                   $141,669.04    $81,211.41   $60,457.63
Interest July 1, 2001
 through March 31, 2003                                   11,918.31
April 1, 2003 Total                                      ----------
 Addition to GLSCO Note
 (GJ4-P2; Entry 4-2)                                     $72,375.94
                                                         ==========
March 31, 2004                 58,548.87     37,956.32    20,592.55
April 1, 2004                                            ==========
 Entry GJ4-P1;
 Addition to GLSCO Note                                   20,592.55
                                                         ==========
March 31, 2005                 58,182.12     37,093.47    21,088.65
April 1, 2005                                            ==========
 Entry GJ4-P1;
 Addition to GLSCO Note                                   21,088.65
                                                         ==========

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 5 of 13 Pages


    f.  On April 1, 2005, the accounts payable amount due of $20,592.55
        by Commerce to GLSCO was transferred to the notes payable due to
        GLSCO.

2.  Collateral Pledged

    The collateral specifically pledged to GLSCO or as otherwise noted is
    as follows:

    a.  San Luis Estates, Inc. (SLE) Certificate No. 24 which is dated
        December 31, 1981, consisting of 48,645 common shares, $0.50 par
        value, being 50% of the total issued and outstanding shares.  SLE
        and Commerce agree that no additional shares of any kind
        whatsoever of SLE will be issued as long as any monies are due to
        GLSCO.  Reference is made to Exhibit 3 included in the April 9,
        1990 confirmation letter.

    b.  A Deed of Trust dated November 3, 1983 by and between Homespan,
        as party of the first part, and Ronald K. Carpenter, Esq.
        (Trustee), as party of the second part, for the benefit of ELM
        and GLSCO, as party of the third part.  The Deed of Trust is in
        favor of ELM and GLSCO and is open-ended to secure the promissory
        note(s) due to ELM and GLSCO and to further secure any future
        obligations that Commerce or Homespan may incur from them.  This
        Deed of Trust is issued to Ronald K. Carpenter, Esq., Trustee for
        the benefit of ELM and GLSCO and is a first lien on the 331-acre
        Standing Rock  Campground located in Camdenton, Missouri.  The
        Deed of Trust was recorded on November 5, 1984 in Camden County,
        Missouri at 1:24 p.m. in Book 122, Page 200.  Reference is made
        to Exhibit 4 included in the April 9, 1990 confirmation letter.
        On August 14, 2000, with the Directors' approval, this property,
        via an agreement, was conveyed to GLSCO in consideration of the
        cancellation of $1,249,050 of debt owed to GLSCO and for other
        consideration contained in the said agreement.

    c.  Commerce/Sanseb Joint Venture (Joint Venture)

        Commerce and Sanseb agree that ELM (the other Lenders were
        included later) has as collateral, the assignment and pledge of
        all of their rights, titles, claims, remedies, and interest
        whatsoever in the Joint Venture which was formed on September 22,
        1987.  In the event of default, whatever interest Commerce and
        Sanseb have in the Joint Venture will be transferred to ELM and
        it will include whatever assets are owned by the Joint Venture,
        including, but not limited to

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 6 of 13 Pages


        the precious metal ore reserves.  Reference is made to Exhibit 5
        included in the April 9, 1990 confirmation letter.

    d.  Uniform Commercial Code Filing - all other specific assets

        An interest with ELM in filing financing statements under the
        Uniform Commercial Code by an assignment and pledge of all
        corporate assets, such as but not limited to the property of
        Commerce, Joint Venture, SLE, and Homespan, wherever located, now
        owned or hereafter acquired is as follows:  all accounts, all
        land contract receivables, contract rights, instruments and
        chattel paper; all inventory, all jewelry and precious stones,
        and all documents relating to inventory, including all goods held
        for sale, lease or demonstration, to be furnished under contracts
        of service, and raw materials, work in process and materials and
        supplies used or consumed in the business of Commerce, the Joint
        Venture, SLE, and Homespan; all office furniture, fixtures and
        all other equipment; all general intangibles, all stock and
        securities of any kind, and all rights, titles and interest in
        the Commerce Group Corp./San Sebastian Gold Mines, Inc. Joint
        Venture, and all additions and accessions to, all spare and
        repair parts, special tools, equipment and replacements for all
        returned or repossessed goods the sale or lease of which gave
        rise to, and all proceeds and products of the foregoing.
        Reference is made to the Wisconsin Department of Financial
        Institutions Uniform Commercial Code filing, Exhibit 6, included
        in the April 9, 1990 confirmation letter, the renewed UCC-1
        filing on December 23, 1996, Exhibit B, included in the April 14,
        1997 confirmation letter, and the UCC-4 continuation filing on
        June 27, 2001 at 8:55 a.m., Filing #02078155 (Exhibit B of the
        May 13, 2002 confirmation letter).

    e.  Acknowledgement of previously recorded collateral provided to the
        Lenders

        Historical information - San Sebastian Gold Mine Concession

        GLSCO, ELM, the Edward L. Machulak Rollover Individual Retirement
        Account (ELM RIRA) and the Sylvia Machulak Rollover Individual
        Retirement Account (SM RIRA) collectively and individually
        identified as the Lender(s), have been assigned on October 19,
        1987, all of the rights, titles, claims, remedies and interest in
        the Joint Venture, and to the mine concession granted by the
        Government of El Salvador to Mineral San Sebastian, S.A. de C.V
        (Misanse) on July 23, 1987, and thereafter from time to time
        amended, and which Misanse then assigned to the Joint Venture on
        September 22, 1987.  This

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 7 of 13 Pages



        collateral specifically includes, but is not limited to, all of
        the San Sebastian Gold Mine (SSGM) precious metal ore reserves.
        Commerce and the Joint Venture have the right to assign this and
        any subsequent concession agreement.  Reference is made to
        Exhibit 5 included in the April 9, 1990 confirmation letter.

        The following collateral has been previously assigned to the
        Lenders pursuant to resolutions adopted by the Directors:

        (1) Commerce/Sanseb Joint Venture (Joint Venture)

            Both Commerce and San Sebastian Gold Mines, Inc. have
            assigned all of the rights, title, claims, remedies and
            interest that each has in the Joint Venture to the Lenders.
            Reference is made to Historical information - San Sebastian
            Gold Mine Concession.

        (2) New SSGM Exploration Concession/License (New SSGM) -
            approximately 40.7694 square kilometers (10,070 acres)
            Government of El Salvador Resolution No. 27.

            On October 20, 2002, the Company applied for the New SSGM,
            which covers an area of 42 square kilometers and includes
            approximately 1.2306 square kilometers of the Renewed SSGM.
            The New SSGM is in the jurisdiction of the City of Santa Rosa
            de Lima in the Department of La Union and in the Nueva
            Esparta in the Department of Morazan, Republic of El
            Salvador, Central America.  On February 24, 2003, the El
            Salvador Department of Hydrocarbons and Mines (DHM) issued
            the New SSGM for a period of four years starting from the
            date following the notification of this resolution which was
            received on March 3, 2003.  The New SSGM may be extended for
            two two-year periods, or for a total of eight years.  Besides
            the San Sebastian Gold Mine,  three other formerly operative
            gold and silver mines known as the La Lola Mine, the Santa
            Lucia Mine, and the Tabanco Mine are included in the New SSGM
            and are being explored.  The Company has complied as required
            by filing its annual activity report and it paid the annual
            surface tax.  This concession had been assigned collectively
            to all of the Lenders named herein on May 12, 2003 and the
            assignment was included in the May 12, 2003 confirmation
            agreement as Exhibit B.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 8 of 13 Pages


        (3) Lease agreement by and between Mineral San Sebastian Sociedad
            Anomina de Capital Variable (Misanse) and Commerce dated
            January 14, 2003

            The term of this lease agreement coincides with the term of
            the Renewed San Sebastian Gold Mine Exploitation Concession
            and consists of 1,470 acres owned by Misanse.  This lease
            agreement has been assigned to all of the Lenders named
            herein on May 12, 2003 and the assignment was included in the
            May 12, 2003 confirmation agreement as Exhibit B.

        (4) Renewed San Sebastian Gold Mine Exploitation
            Concession/License (Renewed SSGM) - approximately 1.2306
            square kilometers (304 acres), Department of La Union, El
            Salvador, Central America (pledged and assigned as collateral
            on May 10, 2004) Government of El Salvador Agreement No. 591.

            On September 6, 2002, at a meeting held with the El
            Salvadoran Minister of Economy and the DHM, it was agreed to
            submit an application for the Renewed SSGM for a 30-year term
            and to simultaneously cancel the concession obtained on July
            23, 1987.  On September 26, 2002, the Company filed this
            application.  On February 28, 2003 (received March 3, 2003)
            the DHM admitted to the receipt of the application and the
            Company proceeded to file public notices as required by
            Article 40 of the El Salvadoran Mining Law and its Reform
            (MLIR).  On April 16, 2003, the Company's El Salvadoran legal
            counsel filed with the DHM notice that it believed that it
            complied with the requirements of Article 40, and that there
            were no objections; and requested that the DHM make its
            inspection as required by MLIR Article 42.  The Company then
            provided a bond which was required by the DHM to protect
            third parties against any damage caused from the mining
            operations, and it simultaneously paid the annual surface t
            ax.  On August 29, 2003 the Office of the Ministry of Economy
            formally presented the Company with the twenty-year Renewed
            SSGM which was dated August 18, 2003.  This Renewed SSGM
            replaces the collateral that the same parties held with the
            previous concession.  On May 20, 2004 (delivered June 4,
            2004) the Government of El Salvador, under their Agreement
            Number 591, extended the exploitation concession for a period
            of 30 years.  A copy of the assignment dated May 10, 2004, is
            attached to the May 10, 2004 confirmation letter as Exhibit B
            and the Renewed SSGM agreement is attached to Exhibit B and
            referred to as Exhibit 1.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 9 of 13 Pages


        (5) San Cristobal Mill and Plant (SCMP) three-year lease by and
            between Commerce and Corporacion Salvadorena de Inversiones
            (Corsain), an El Salvadoran governmental agency, executed on
            Monday, April 26, 2004, retroactive to November 13, 2003.
            Pledged and assigned as collateral on May 10, 2004.

            The renewed three-year SCMP lease for the property located
            near the City of El Divisadero was finalized and executed on
            Monday, April 26, 2004, and is retroactive to November 13,
            2003.  This May 10, 2004 assignment is included in the May
            10, 2004 confirmation letter as Exhibit B and the lease
            agreement is attached to Exhibit B and referred to as Exhibit
            2.

    f.  Acknowledgment of collateral provided through May 9, 2005

        Commerce's Directors have on May 9, 2005 authorized and directed
        Commerce's Officers to assign all of the rights, titles, claims,
        remedies and interest it has to GLSCO, ELM, the ELM RIRA, the SM
        RIRA and SM, collectively and individually referred to as
        Lenders, as additional collateral for all of the outstanding
        loans and obligations as of March 31, 2005, including all future
        advances of any kind.  Collateral that has been provided through
        May 9, 2005 is:

        Nueva Esparta Exploration Concession/License (Nueva Esparta) - 45
        square kilometers (11,115 acres) Resolution No. 271

        On or about October 20, 2002, the Company filed an application
        with the DHM for the Nueva Esparta Exploration Concession/License
        which consists of 45 square kilometers and is located north and
        adjacent to the New SSGM.  On May 25, 2004 the Government of El
        Salvador, under their Resolution No. 271, issued the Nueva
        Esparta Exploration Concession/License for a period of four years
        starting from the date following the notification of this
        resolution which was received on June 4, 2004.  This
        concession/license may be extended for two two-year periods or
        for a total of eight years.  This rectangular area is in the
        Departments of La Union (east) and Morazan (west) and in the
        jurisdiction of the City of Santa Rosa de Lima, El Salvador,
        Central America.  Included in the Nueva Esparta are eight other
        formerly operated gold and silver mines known as:  the Banadero
        Mine, the Carrizal Mine, the Copetillo Mine, the Grande Mine, the
        La Joya Mine, the Las Pinas Mine, the Montemayor Mine,

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 10 of 13 Pages


        and the Oro Mine.  A copy of the assignment dated May 9, 2005 is
        attached to this document (Exhibit C) and the Nueva Esparta
        Exploration Concession is attached to Exhibit C and referred to
        as Exhibit 1.

3.  Cross Pledge Collateral Agreement

    GLSCO, ELM, the ELM RIRA, the SM RIRA and SM individually are
    entitled to specific collateral that has been pledged to them by
    Commerce, its subsidiaries, affiliates and the Joint Venture.  Upon
    default by Commerce, or its subsidiaries or affiliates or the Joint
    Venture, then GLSCO, ELM, the ELM RIRA, the SM RIRA and SM have the
    first right to the proceeds from the specific collateral pledged to
    each of them.  Commerce, its subsidiaries, affiliates, and the Joint
    Venture also have cross-pledged the collateral without diminishing
    the rights of the specific collateral pledged to each of the
    following:  GLSCO, ELM, the ELM RIRA, the SM RIRA and SM.  The
    purpose and the intent of the cross pledge of collateral is to assure
    GLSCO, ELM, the ELM RIRA, the SM RIRA, and SM, that each of them
    would be paid in full; thus, any excess collateral that would be
    available is for the purpose of satisfying any debts and obligations
    due to each of the named parties.  The formula to be used (after
    deduc ting the payments made from the specific collateral) is to
    total all of the debts due to GLSCO, ELM, the ELM RIRA, the SM RIRA
    and SM, and then to divide this total debt into each individual debt
    to establish each individual's percentage of the outstanding debt
    due.  This percentage then will be multiplied by the total of the
    excess collateral to determine the amount of proceeds each party
    should receive from the excess collateral.  Then the amount due to
    each of them would be distributed accordingly.

4.  Cancellation of Inter-Company Debts Upon Default

    Since certain of the collateral specifically or collectively pledged
    to GLSCO, ELM, the ELM RIRA, the SM RIRA and SM consists of the
    common stock of Homespan, Ecomm, Sanseb, SLE, Misanse, UDI and the
    interest in the ownership of the Joint Venture, Commerce agreed, upon
    default of the payment of principal or interest to any of the
    individual Lender(s) mentioned herein, that it will automatically
    cancel any inter-company debts owed to Commerce by any of its
    wholly-owned subsidiaries or affiliates or the Joint Venture at such
    time as any of the stock or Joint Venture ownership is transferred to
    the collateral holders as a result of default of any promissory note.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 11 of 13 Pages

5.  Guarantors

    This agreement further confirms that Commerce and all of the
    following are guarantors to the obligations due to GLSCO and to the
    loans made by GLSCO to Commerce:  Joint Venture, Homespan, Ecomm,
    SLE, Sanseb and UDI.  They jointly and severally guarantee payment of
    the note(s) that they caused to be issued and also agree that these
    note(s) may be accelerated in accordance with the provisions
    contained in the agreement and/or any collateral or mortgages
    securing these notes.  Also, Commerce, all of its subsidiaries and
    the Joint Venture agree to the cross pledge of collateral for the
    benefit of GLSCO, ELM, the ELM RIRA, the SM RIRA, and SM.  Reference
    is made to Exhibit 7 included in the April 9, 1990 confirmation
    letter.

6.  Re-Execution Agreement(s)

    In the event GLSCO deems that it is necessary or advisable for GLSCO
    to have Commerce re-execute any document(s) entered into, including,
    but not limited to the promissory note(s) or collateral agreement(s),
    Commerce will re-execute such document(s) reasonably required by
    GLSCO.  Commerce also acknowledges that Commerce may be liable to pay
    certain costs related to any of the transactions entered into with
    GLSCO.  If at a later date GLSCO determines that an error has been
    made in the payment of such costs to it then it may demand payment
    and Commerce does hereby agree to make such payment forthwith.  All
    requests for corrections of any errors and/or payment of costs shall
    be complied with by Commerce within seven (7) days of GLSCO's written
    request.   The failure of Commerce to comply with Commerce's
    obligation(s) hereunder shall constitute a default and shall entitle
    GLSCO to the remedies available for default under any provisions of
    the agreements including, but not limited to the promissory note(s)
    and/or the collateral pledge agreement(s) and/or any other Commerce
    obligation(s).

7.  Omissions

    Commerce believes that it has included all of its obligations, monies
    due and has listed all of the collateral due to GLSCO, however, since
    these transactions have taken place over  a long period of time in
    which changes could have taken place, it is possible that
    inadvertently some item(s), particularly collateral, could have been
    omitted.  If that should prove to be a fact, then Commerce, the Joint
    Venture, Homespan, Ecomm, SLE, Sanseb, and UDI agree that those
    omissions of collateral, if any, are meant to be included as
    collateral under this confirmation agreement.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 12 of 13 Pages

If you are in agreement with the contents of this letter, please sign
below and return one copy to Commerce.

Very truly yours,

COMMERCE GROUP CORP.

/s/ Edward A. Machulak

Edward A. Machulak
Secretary


<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 9, 2005
Page 13 of 13 Pages


The contents of this letter are agreed by the following:

COMMERCE/SANSEB JOINT VENTURE             HOMESPAN REALTY COMPANY, INC.
as Guarantor (Joint Venture)              as Guarantor (Homespan)

/s/ Edward L. Machulak                    /s/ Edward L. Machulak
_______________________________________   __________________________________
By:  Edward L. Machulak, Auth. Designee   By:  Edward L. Machulak, President


ECOMM GROUP INC.                          SAN LUIS ESTATES, INC.
as Guarantor (Ecomm)                      as Guarantor (SLE)

/s/ Edward A. Machulak                    /s/ Edward L. Machulak
_______________________________________   __________________________________
By:  Edward A. Machulak, President        By:  Edward L. Machulak, President


SAN SEBASTIAN GOLD MINES, INC.            UNIVERSAL DEVELOPERS, INC.
as Guarantor (Sanseb)                     as Guarantor (UDI)

/s/ Edward L. Machulak                    /s/ Edward L. Machulak

_______________________________________   __________________________________
By:  Edward L. Machulak, President        By:  Edward L. Machulak, President


Accepted by:

GENERAL LUMBER & SUPPLY CO., INC.


/s/ Sylvia Machulak

________________________________
By:  Sylvia Machulak, President
Date:  May 9, 2005

<PAGE>


                          Exhibit A to Exhibit 99.1
                  (Schedule of Principal, Interest, Advances
                    and Withdrawals as of March 31, 2005
               has been purposely omitted as it only reflects
               the calculations of the principal and interest.)


<PAGE>
                          Exhibit B to Exhibit 99.1


                            RENEWED PROMISSORY NOTE


Borrower: Commerce Group Corp.      Lender:  General Lumber & Supply Co., Inc.
          6001 North 91st Street             6001 North 91st Street.
          Milwaukee, WI  53225               Milwaukee, WI  53225

Principal Amount:      $1,659,754.49
Initial Rate:          4.000% + prime rate, but not less than 16.000%
Date of Renewed Note:  March 31, 2005

PROMISE TO PAY.  COMMERCE GROUP CORP. ("Borrower") promises to pay to GENERAL
LUMBER & SUPPLY CO., INC. ("Lender"), or order, in lawful money of the United
States of America, the principal amount of One Million Six Hundred Fifty Nine
Thousand Seven Hundred Fifty Four and 49/100 Dollars  ($1,659,754.49),
together with interest, paid monthly, on the unpaid principal balance from
March 31, 2005, until paid in full.

PAYMENT.  This is an open-ended, secured, on-demand payment, renewed
promissory note.  Interest is to be paid monthly.  The Lender, at its
discretion, can add the monthly interest due to the principal balance.  Unless
otherwise agreed or required by applicable law, payments will be applied first
to any accrued unpaid interest; and then to principal.  The annual interest
rate for this Note is computed on a 365/360 basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding and the interest is payable monthly.
Borrower will pay Lender at Lender's address shown above or at such other
place as Lender may designate in writing.

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change
from time to time based on changes in the prime rate as quoted in the Wall
Street Journal plus four percent, but not less than sixteen percent per annum.
Borrower understands that Lender may make loans to the Borrower based on other
rates as well.  The prime rate currently is 5.750% per annum.  The interest
rate to be applied to the unpaid principal balance of this Note will be at a
rate of 4.000 percentage points over the prime rate, but not less than 16.000%
per annum.  NOTICE:  Under no circumstances will the interest rate on this
Note be less than 16.000% per annum or more than the maximum rate allowed by
applicable law.

PREPAYMENT.  Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due.  Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to pay on demand,
the entire amount due.  Rather, any payment will reduce the principal balance
due.  Borrower agrees not to send Lender payments marked "paid in full,"
"without recourse," or similar language.  If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note,
and Borrower will remain obligated to pay any further amount owed to Lender.

INTEREST AFTER DEFAULT.  Upon default, including failure to pay on demand,
Lender, at its option, may, if permitted under applicable law, increase the
variable interest rate on this Note to 6.000 percentage points over the prime
rate or over the 16.000% rate, whichever is higher.  The interest rate will
not exceed the maximum rate permitted by applicable law.

DEFAULT.  Each of the following shall constitute an event of default ("Event
of Default") under this Note:

     Payment Default.  Borrower fails to make any payment when demand is made
     under this Note.

     Other Defaults.  Borrower fails to comply with or to perform any other
     term, obligation, covenant or condition contained in this Note or in any
     of the related documents or to comply with or to perform any term,
     obligation, covenant or condition contained in any other agreement
     between Lender and Borrower.

<PAGE>

     Default in Favor of Third Parties.  Borrower or any Grantor defaults
     under any loan, extension of credit, security agreement, purchase or
     sales agreement, or any other agreement, in favor of any other creditor
     or person that may materially affect any of Borrower's property or
     Borrower's ability to repay this Note or perform Borrower's obligations
     under this Note or any of the related documents.

     False Statements.  Any warranty, representation or statement made or
     furnished to Lender by Borrower or on Borrower's behalf under this Note
     or the related documents is false or misleading in any material respect,
     either now or at the time made or furnished or becomes false or
     misleading at any time thereafter.

     Insolvency.  The dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against
     Borrower.

     Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower or by any
     governmental agency against any collateral securing the loan.  However,
     this Event of Default shall not apply if there is a good faith dispute by
     Borrower as to the validity or reasonableness of the claim which is the
     basis of the creditor or forfeiture proceeding and if Borrower gives
     Lender written notice of the creditor or forfeiture proceeding and
     deposits with Lender monies or a surety bond for the creditor or
     forfeiture proceeding, in an amount determined by Lender, in its sole
     discretion, as being an adequate reserve or bond for the dispute.

     Events Affecting Guarantor.  Any of the preceding events occurs with
     respect to any Guarantor of any of the indebtedness or any Guarantor
     disputes the validity of, or liability under, any guaranty of the
     indebtedness evidenced by this Note.

     Adverse Change.  A material adverse change occurs in Borrower's financial
     condition, or Lender believes the prospect of payment or performance of
     this Note is impaired.

     Insecurity.  Lender in good faith believes itself insecure.

LENDER'S RIGHTS.  Upon default or upon demand, the Lender may declare the
entire unpaid principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.

COLLATERAL.  Borrower acknowledges this Note is secured by all security
agreements, guarantees, mortgages, and other security instruments previously
granted, contemporaneously granted, and granted in the future, and it has the
collateral and other rights all as contained in a certain confirmation
agreement dated May 10, 2004 between all parties contained therein, and as
subsequently amended and updated from time to time.

ATTORNEYS' FEES; EXPENSES.  Lender may hire or pay someone else to help
collect this Note if Borrower does not pay.  Borrower will pay Lender that
amount.  This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses, whether or not there is a
lawsuit, including attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals.  If not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law.

GOVERNING LAW.  This Note will be governed by, construed and enforced in
accordance with the laws of the State of Wisconsin.  This Note has been
accepted by Lender in the State of Wisconsin.

<PAGE>

OTHER LOAN AGREEMENTS.  If Borrower and Lender have either previously or
contemporaneously entered into a Loan or Confirmation Agreements, it is agreed
that this Note is subject to the terms and conditions of such Loan or
Confirmation Agreements.  For purpose of this provision, Loan or Confirmation
Agreements shall include, but not be limited to, a Business Loan Agreement or
any other Loan or Confirmation Agreements.

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon Borrower,
and upon Borrower's successors and assigns, and shall inure to the benefit of
Lender and Lender's heirs, executors, administrators,  successors and assigns.

GENERAL PROVISIONS.  This Note benefits Lender and its successors and assigns,
and binds Borrower and Borrower's successors, assigns, and representatives.
Lender may delay or forgo enforcing any of its rights or remedies under this
Note without losing them.  Borrower and any other person or corporation who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor.  Upon any change in
the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability.  All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan
or release any party or guarantor or collateral; or impair, fail to realize
upon or perfect Lender's security interest in the collateral; and take any
other action deemed necessary by Lender without the consent of or notice to an
yone.  All such parties also agree that Lender may modify this loan without
the consent of or notice to anyone other than the party with whom the
modification is made.  The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE INTEREST RATE PROVISIONS.  BORROWER AGREES TO THE
TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

COMMERCE GROUP CORP.

/s/ Edward L. Machulak
______________________________________________
By:  Edward L. Machulak, President


/s/ Edward A. Machulak
_____________________________________________________
By:  Edward A. Machulak, Vice President and Secretary


<PAGE>

                          Exhibit C to Exhibit 99.1

                                Assignment

     For and in consideration of the sum of One Dollar ($1.00) and other
good and valuable consideration such as, but not limited to, the
continuance of extending the existing substituted, consolidated
open-ended, secured, on-demand promissory note(s) issued by Commerce
Group Corp. (Commerce), a Wisconsin corporation located at 6001 North
91st Street, Milwaukee, Wisconsin  53225, in hand paid, the receipt of
which is hereby acknowledged, Commerce does hereby sell, assign and
transfer to General Lumber & Supply Co., Inc., a Wisconsin corporation,
Edward L. Machulak, as an individual and not as a Director or Officer of
Commerce, the Edward L. Machulak Rollover Individual Retirement Account,
the Sylvia Machulak Rollover Individual Retirement Account, and Sylvia
Machulak, as an individual, and their heirs, executors, administrators,
successors and assigns, all who reside in the  County of Milwaukee, State
of Wisconsin, United States of America, individually and collectively
referred to as "Le nders," all of Commerce's rights, titles, claims,
remedies, and interests whatsoever in and to the exploration concession
identified as the Nueva Esparta Exploration Concession/License which was
granted by the Office of the Government of El Salvador Ministry of
Economy's office and the Director of Hydrocarbons and Mines under its
Resolution No. 271 dated May 28, 2004 (delivered June 4, 2004) to
Commerce Group Corp. consisting of an area of 45 square kilometers
identified as Cartographic Sheet Number 2657-111 (scale 1:50000) located
in the municipality of Santa Rosa de Lima, in the Departments of Morazan
and La Union, Republic of El Salvador, Central America, and more fully
described in the attached Spanish and English Resolution No. 271 (Exhibit
1) which is made an integral part of this assignment.

     Said claims, rights, title and interest are pledged, sold, assigned
and transferred to the Lenders as collateral security for loans made and
for loans to be made by the Lenders to Commerce and also as collateral
security for any and all liabilities, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising from
Commerce to the Lenders.

     Commerce further acknowledged that Commerce's Directors unanimously
adopted this Assignment by a resolution on May 9, 2005, and that the
purpose of this Assignment is to provide additional collateral to the
above-described Lenders.

     This Assignment shall extend to the full term remaining on the above
concession and license or lease and in any amendments, renewals, changes
or extensions thereof.

     In Witness Whereof, Commerce has caused this instrument to be
signed, sealed and delivered by its proper officers thereunto duly
authorized this 9th day of May 2005.

ATTEST:

COMMERCE GROUP CORP.                  COMMERCE GROUP CORP.

/s/ Edward L. Machulak                /s/ Edward A. Machulak

-----------------------------         -----------------------------
Edward L. Machulak, President         Edward A. Machulak, Secretary


State of Wisconsin  )
                    )  ss.
County of Milwaukee )

     On this 9th day of May, 2005, before me, personally appeared Edward
L. Machulak, President and Edward A.  Machulak, Secretary of Commerce
Group Corp., to me known to be the persons described in, and who executed
the foregoing instrument, and acknowledged that they executed the same as
their free act and deed.

                                      /s/ Sylvia Machulak
                                      -----------------------------------
                                      Sylvia Machulak
                                      Notary Public, Milwaukee County, WI
                                      My commission expires June 11, 2006

<PAGE>

                  Exhibit 1 to Exhibit C of Exhibit 99.1

            [English translation of attached Spanish document.]

MINISTRY OF ECONOMY
Republic of El Salvador

                             RESOLUTION No. 271

Ministry of Economy:  San Salvador, at 9:05 AM of the day May 25, 2004.

In view of the Recourse of Appeal introduced into the Directorate of
Hydrocarbons and Mines, on December 19, 2003, before the Minister of
Economy, by Sr. Jose Antonio Alfaro Castro, Lawyer, of this domicile,
acting in his capacity of General Power of Attorney for the Company
"COMMERCE GROUP CORP" of this domicile, against Resolution No. 178 issued
at 14:10 on December 1, of the same year by the cited Directorate, that
declares without standing the request for Exploration License that later
on will say, and,

HAVING READ THE ARGUMENTS AND CONSIDERING:

I.   That through the referenced Resolution the Directorate of
     Hydrocarbons and Mines of this Ministry declared without standing
     the Minerals Exploration License especially for gold an silver that
     Dr. Jose Antonio Alfaro Castro requested in the name of his
     mentioned grantor of Power on October 30, 2002 for the area called
     NUEVA ESPARTA for a surface extension of 45 square kilometers
     identified in cartographic sheet number 2657-III, scale 1 : 50,000
     located in the municipality of Santa Rosa de Lima, in the
     Departments of Morazan and La Union respectively.

II.  That having admitted the Recourse, the files were transferred to the
     Secretary of State with prior notification to the referenced Company
     and receiving it, was sent to be heard for the term of the Law, on
     completing the hearing through the mentioned Power holder, expressed
     that based on Article 45 second line item in the Mining Law, he
     requested an opening of proofs, which was done and as well the
     applicant presented a document in which he stated that the
     Directorate of Hydrocarbons and Mines on issuing the referenced
     Resolution founded it on the following arguments: a) little
     geological investigation of the exploitation program presented
     (SIC); b) lack of sufficient technical capacity to develop the
     project on the part of the professionals proposed by the applying
     Company; c) That the applying Company did not fulfill the
     requirements in the first line item of Article 9 of the Mining Law;
     requirements that refer to the technical and financial capacity to
     develop mining projects.

<PAGE>

III. That in the referred to period of Proof, the applicant presented a
     new work plan prepared by known technicians in the material, in
     which a program of activities is reflected that complies with the
     requirements for this kind of project to be developed in the first
     four years by stages, projecting activities like geological mapping,
     opening of trenches, geochemistry, laboratory analysis; and the
     costs of investment in each stage.  Presenting besides, the
     documents that contain the names of the companies that will
     participate in the Project; as well as the CV's of the companies
     that will participate in it, and the CV's of the technicians in the
     material that have the required qualifications, and the chart of
     investment, costs and expenses of the applying company, copy of the
     correspondence in which is sketched the financial capacity, in which
     for now the invested money has been for the payment of
     administrative expenses and in a lesser scale for investment in
     exploration, referring that it will be increased as reflected in the
     related project; with that it proves compliance with what is
     established in article 9 of the Mining Law.  That with what is
     explained and with the documental proof that is presented, it
     overcomes the deficiencies expressed by the Directorate for
     Hydrocarbons and Mines, who asks that the Declaration Without
     Standing be reconsidered and grant the Exploration License
     requested.

IV.  Upon analyzing the resolution that is impugned, it is warned that in
     it conclusions were expressed in the sense that: " a) little
     geological investigation of the exploitation (sic) program
     presented"; b) "lack of technical capacity sufficient to develop the
     project on the part of the professionals proposed by the requesting
     company", without the argumentation, the criteria or the factual
     reasons being laid out in it that allows any analysis to arrive to
     said conclusions, therefore the reasoning is completely transparent
     in regard to valuing the documents presented with the application.


V.   Consequent with what is expressed, in matters of Exploration
     Licenses it is necessary to understand:  That the text and spirit
     with which the Mining Law was issued, just as it was established in
     the Considering and in its articles 8 and 9, was that of granting
     Exploration Licenses and subsequently a concession for the
     exploration of minerals, to those companies that carry out this
     activity through the application of modern systems that allow fully
     to take advantage of the minerals, having conditioned as a
     requirement to acquire mining rights, the ideal; determining as
     ideal those who proved to have the technical and financial capacity
     to develop mining projects;  that on reviewing the documents
     presented by the appellant as proof are: the new work plan for the
     Nueva Esparta Exploration project; program of exploration for the
     mining project, the program to be developed in four years and in
     four stages, one per year; letter and summary of Financial
     Statements, report of the Public A ccountant of the investment,
     costs and expenses made since January 1, 1999 to June 30, 2003,
     certified Balance Sheets and Financial Statements by

<PAGE>

     the Public Auditor, documentation that has value as proof.  With
     respect to the technical capacity, the names of companies are
     presented with letters of commitment that they will work in the
     exploitation; and curriculum vitae of the technicians that will
     participate in the project. From the latter it is concluded that the
     applying company indeed has a geological exploration project for an
     area with mining background and counts with technical personnel with
     technical capacity to develop the project, for which reason this
     Ministry considers that the applying company complies with the
     requirements that for that purpose the Law establishes in article 9,
     such as having technical and financial capacity to develop the
     mining project and resolves the recourse (of appeal) presented has
     standing.

Therefore,

In use of my legal faculties and based on what is established in Article
45 of the Mining Law and the considerations expressed;

RESOLVE:

1.  The Recourse of Appeal presented December 19, 2003 by Dr. Jose
    Antonio Alfaro Castro in his capacity as Power of Attorney for the
    Company COMMERCE GROUP CORP has standing; and leaves without effect
    Resolution 178 issued by the Directorate of Hydrocarbons and Mines of
    this Ministry at 14:00 hours of the day December 1, 2003.

2.  Returns the present archives to their place of origin to the end of
    granting the License requested.

3.  The Directorate of Mines and Hydrocarbons will proceed to carry out
    the corresponding monitoring to the end of assuring the fulfillment
    of the obligations on the part of the beneficiary under the pain of
    applying the sanctions that are legally applicable.

                             MIGUEL E. LACAYO
                                MINISTER

                    [Seal of the Ministry of Economy]



MINISTERIO DE ECONOMIA
Republica de El Salvador, C.A.


                              RESOLUCION No. 271

MINISTERIO DE ECONOMIA:   San Salvador, a las nueve horas con cinco
minutos del dia venticinco de mayo de dos mil cuatro.

Visto el Recurso de Apelacion interpuesto en la Direccion de
Hidrocarburos y Minas, el diecinueve de diciembre de 2003, para ante el
Ministro de Economia, por el Doctor Jose Antonio Alfaro Castro, Abogado
de esta domicilio, actuando como apoderado de la Sociedad COMMERCE GROUP
CORP., en contra de la Resolucion No. 178 emitada a catorce horas con
diez minutos del uno de diciembre del mismo ano de la citada Direccion,
que declara sin lugar solicitud de Licencia de Explotacion que adelante
se dira y,

LEIDOS LOS AUTOS Y CONSIDERANDO:

I.    Que mediante la Resolucion recurrida, la Direccion de Hidrocarburos
      y Minas de este Ministerio, declaro sin lugar la Licencia de
      Exploracion de Minerales especialmente oro y plata que en nombre de
      su mencionado poderdante solicito el Doctor Alfaro Castro, el 30 de
      octubre del 2002, en el area denominada NUEVA ESPARTA, de una
      extension superficial de 45 kilometros cuadrados, identificada en
      la hoja cartografica numero 2657-III escala 1:50 ubicada, en los
      municipios de Sociedad y Santa Rosa de Lima, en los departamentos
      de Morazan y La Union respectivamente.

II.   Que admitido el Recurso, fueron trasladadas las diligencias a esta
      Secretaria de Estado, previa notificacion a la Sociedad recurrente;
      y recibidas las mismas se le mando a oir por el termino de Ley,
      quien al evacuar la audiencia por medio del mencionado Apoderado,
      expreso que en base al articulo 45 inciso segundo de la Ley de
      mineria, solicitaba se abriera a pruebas; por lo que asi se hizo, y
      en el mismo, el recurrente presento un escrito en el que manifiesta
      que la Direccion de Hidrocarburos y Minas al emitir la Resolucion
      recurrida, la fundamento en los argumentos siguientes:  a) poca
      investigacion geologica del programa de explotacion presentado;  b)
      falta de capacidad tecnica suficiente para desarrollar el proyecto
      de parte de los profesionales propuestos por la sociedad
      solicitante; c) Que la Sociedad solicitante no llena los requisitos
      senalados en el inciso primero del articulo 9 de la Ley de Mineria;
      requisitos que se refiere a la capacidad tecnica y financiera para
      desar rollar proyectos mineros.

<PAGE>

III.  Que en el referido periodo de Prueba, el recurrente presento un
      nuevo plan de trabajo elaborado por tecnicos conocedores de la
      materia en donde se refleja un programa con actividades que cumplen
      los requisitos para esta clase proyectos a desarrollar en los
      primeros cuatro anos por etapas, proyectando actividades como mapeo
      geologico, apertura de trincheras geoquimicas, analisis de
      laboratorio; y los costos de inversion en cada etapa.  Presentando
      ademas los documentos que contienen los nombres de las empresas que
      participaran en el Proyecto, asi como los curriculos de las
      empresas que participaran en el mismo, y los curriculos de los
      tecnicos en la materia que reunen los requisitos requeridos, y el
      cuadro de inversion, costos y gastos de la Sociedad solicitante,
      copia de correspondencia en donde se esboza la capacidad
      financiera, en la cual por ahora, el dinero invertido ha sido para
      el pago de gastos administrativos y en menos escala para inversion
      en exploracion refiriendo que se aumentara como se refleja en el
      proyecto relacionado:  con lo que comprueba darle cumplimiento a lo
      que establece el articulo 9 de la Ley de Mineria.  Que con lo
      expuesto y la prueba documental que presenta superan las
      deficiencias expresadas por la Direccion de Hidrocarburos y Minas y
      se pide se reconsidera la Declaratoria sin lugar y se otorgue la
      Licencia de exploracion solicidata.

IV.   Al analizar la resolucion que se impugna, se advierte que en la
      misma se expresaron conclusiones en el sentido que:  "a) poca
      investigacion geologica del programa de explotacion presentado; b)
      falta de capacidad tecnica suficiente para desarrollar el proyecto
      de parte de los profesionales propuestos por la sociedad
      solicitante," sin que se expongan en la misma, la argumentacion,
      los criterios o razones facticas que permitan en cualquier
      analisis, llegar a dichas conclusiones, de manera que el
      razonamiento sea completamente transparente en cuanto a la
      valoracion de los documentos presentados con la solicitud.

V.    Consecuente con los expuesto en materia de Licencias de Exploracion
      ha de entenderse:  Que el texto y el espiritu con que se emitio la
      Ley de Mineria, tal como se dejo establecido en el considerando I y
      articulo 8 y 9 de la misma, fue la de otorgar Licencias de
      Exploracion y subsiguiente concesion para la Exploracion de
      Minerales, a aquellas empresas que realicen esa actividad mediante
      la aplicacion de sistemas modernos que permitan el aprovechamiento
      integral de los minerales, habiendo condicionado como requisito
      para adquirir derechos mineros, la idonidad; determinado como
      idoneas quienes comprobaran tener capacidad tecnica y capacidad
      financiera para desarrollar proyectos mineros:  que al revisar los
      documentos presentados por el apelante como prueba, son nuevo plan
      de trabajo de proyecto de exploracion Nueva Esparta, programa de
      exploracion del proyecto minero, el programa a desarrollar en los
      cuatro anos en cuatro etapas, una por ano:  carta y resumen de
      Estados Financieros, informe de Contador Publico de la inversion,
      costos, y gastos efectuados desde el 01 de enero de 1999 al 30 de
      junio de 2003, Balance y Estados Financieros certificados por

<PAGE>

      Auditor Publico, documentacion que tiene valor probatorio.
      Respecto a la capacidad tecnica presenta los nombres de empresas
      con cartas compromiso de que trabajaran en la exploitacion
      curriculun vitae de los tecnicos que participaran en el proyecto.
      De lo antes expuesto se concluye que la empresa solicitante si
      tiene un proyecto de exploracion geologica para un area con
      antecedentes mineros, y cuenta con personal tecnico con capacidad
      para desarrollar el proyecto, por lo que este Ministerio considera
      que la Sociedad solicitante cumple con las exigencias que  al
      efecto establece la Ley en el articulo 9, como es el tener
      capacidad tecnica y financiera para desarrollar el proyecto minero
      y resuelve ha lugar al recurso interpuesto.

Por tanto,

En uso de mis facultades legales, y con base a lo establecido en el Art.
45 de la Ley de Mineria y las consideraciones expuestas.

RESUELVO:

1.  Ha lugar el recurso de Apelacion interpuesto el 19 de diciembre de
    dos mil tres, por el Doctor Alfaro Castro en calidad de Apoderado de
    la Sociedad COMMERCE GROUP CORP.; y Dejase sin efecto la
    resolucion178 emitada por la Direccion de Hidrocarburos y Minas de
    este Ministerio, a las catorce hora del dia uno de diciembre de dos
    mil tres.

2.  Vuelvan las presentes diligencias a su lugar de origen a fin que se
    otorgue la licencia solicitada.

3.  La Direccion de Minas e Hidrocarburos procecera a realizar el
    moniloreo correspondiente, a fin de asegurar el cumplimiento de las
    obligaciones por parte del beneficiario so pena de aplicar las
    sanciones que legalmente sean procedentes.

                 Firma por:  MIGUEL E. LACAYO, MINISTRO