EXHIBIT 99.1

                      COMMERCE GROUP CORP.
                      6001 NORTH 91ST ST.
                   MILWAUKEE, WI  53225-1795
               414/462-5310 . FAX 414/462-5312
                  Stock Symbol:  CGCO (OTCBB)

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 12, 2003


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 confirmation and status letter you
requested from Commerce and its affiliates to establish and confirm the
amount due and the collateral pledged to General Lumber & Supply Co.,
Inc. (GLSCO)  as of Commerce's fiscal year ended March 31, 2003.  Today,
Commerce's Directors approved, ratified and confirmed the contents of
this letter and authorized me to authenticate and confirm the outstanding
obligations due to GLSCO, and to describe the collateral pledged to GLSCO
as of Commerce's fiscal year ended March 31, 2003, which are 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, (now Bank One), 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, 2003 is $1,120,442.34.
         (Schedule of Principal and Interest as of March 31, 2003,
         Exhibit A)

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 2 of 10 Pages


         Commerce is no longer issuing monthly promissory notes for the
         payment of interest, purchases, rent, etc., but pursuant to our
         mutual understanding, Commerce is adding these liabilities or
         deducting any payments to the current open-ended outstanding
         promissory 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 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 13, 1998 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, 2003,
         $217.55 is 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 on an arms-length transaction.  The transactions
         consummated during this fiscal year are as follows:

         On January 10, 2003, GLSCO purchased from Commerce 575,000 of
         Commerce's restricted common shares, $.10 par value, at a unit
         price of $.175 per share, for a total of $100,625.02.  The share
         price was established by using the average market closing price
         during a three-month period of time (October 2, 2002 through
         December 27, 2002).  The payment for these shares was made by
         reducing the outstanding promissory note balance due to GLSCO
         from Commerce.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 3 of 10 Pages



         On March 6, 2003, GLSCO purchased from Commerce, 175,000 of
         Commerce's restricted common shares, $.10 par value, at a unit
         price of $.27 a share, for a total of $47,250.  The share price
         was established by using the average market closing price during
         a three-month period of time (December 2, 2002 though February
         10, 2003).  The payment for these shares was made by reducing
         the outstanding promissory note balance due to GLSCO from
         Commerce.

         Commerce, Homespan and GLSCO entered into an agreement on August
         14, 2000 in which Commerce and Homespan agreed to sell to GLSCO
         the real estate identified as the Standing Rock Campground (SRC)
         located at the Lake of the Ozarks in Camden County, Missouri,
         for the sum of $1,249,050.  A Warranty Deed was conveyed to
         GLSCO and filed with the State of Missouri Camden County
         Recorder.  The contract stipulates that if SRC is sold by GLSCO
         within one year from November 6, 2000, then an adjustment would
         be made to the promissory note issued by Commerce to GLSCO as
         shown in the following example:



                                              Example A    Example B
                                              ---------    ---------

         Net proceeds (including sales
         commission and related
         expenses) received from the
         sale of the Standing Rock
         Campground to a third party         $1,500,000    $1,000,000
         General Lumber & Supply Co.,
         Inc.'s  cost via reduction of
         its promissory note due from
         Commerce Group Corp.                 1,249,050     1,249,050
         The difference would be added
         or subtracted to the General
         Lumber & Supply Co., Inc.
         promissory note with an
         interest adjustment
         retroactive to the closing
         date of the sale.                   __________    __________
                                             $  250,950    $(249,050)
                                          A Subtraction   An Addition

         On March 8, 2001, and thereafter extended, GLSCO executed a
         listing contract with Gaslight Gundaker GMAC Real Estate Agents
         located in Laurie, Missouri, to sell the SRC for a sum of $1.8
         million less a 6% real estate broker's commission and less all
         usual related costs incurred in the sale of this type of real
         estate.  Prior to this listing, the property was listed with
         Re/Max at the Lake of Laurie, Missouri.

         In order to make an orderly transaction, the parties agreed that
         Commerce would operate the SRC until the end of its fiscal year,
         which is March 31, 2001.  Therefore, the amount of the
         promissory note due to Commerce was reduced by the purchase
         price of $1,249,050 during the fiscal year ended March 31, 2001.
         The SRC was not sold during this agreement period, expiring
         November 6, 2001, however, GLSCO extended the time period to
         November 6, 2002.  Therefore, the arrangement automatically
         expired on November 6, 2002.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 4 of 10 Pages



         In addition, Commerce retained the profits earned from the SRC
         operations and the following describes the amount due to GLSCO:


                         03/31/02      03/31/03        Total
                         --------      --------        -----
         Revenues       $73,364.97    $68,304.07    $141,669.04
         Expenses        40,202.17     41,009.24      81,211.41
                        ----------    ----------    -----------
         Profit         $33,162.80    $27,294.83    $ 60,457.63

         Therefore, as of March 31, 2003, Commerce acknowledges that it
         owes GLSCO the sum of $60,457.63 plus accumulated interest in
         the sum of $11,918.31, for a total of $72,375.94.  This accounts
         payable will be converted to notes payable due to GLSCO on April
         1, 2003.

     e.  On June 30, 2001, GLSCO purchased 250,000 restricted common
         shares at a price of $.15 per share and received a two-year
         stock option to purchase 250,000 common shares at a price of
         $.25 per share.  The terms of this transaction are no less
         favorable than those obtained from arms-length third parties.

2.   Collateral Pledged to GLSCO

     The collateral specifically pledged to GLSCO 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
         Edward L. Machulak (ELM),  as an individual, and not as a
         Director or Officer of Commerce 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 lien on the 331-acre Standing Rock  Campground
         located in Camdenton, Missouri.  The Deed of Trust was filed for
         record on November 5, 1984 in Camden County, Missouri at 1:24
         p.m. in Book 122, Page 200.  See item 1(d) contained herein.
         Reference is made to Exhibit 4 included in the April 9, 1990
         confirmation letter.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 5 of 10 Pages

     c.  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
         collateral specifically includes 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.  Effective February
         1996, the Government of El Salvador approved a revised version
         of the mining law.  Therefore, Commerce applied for the SSGM
         concession applicable to the 1996 mining law.  This concession
         is subject to compliance requirements, which have been presented
         to the El Salvador Director of Hydrocarbons and Mines.
         Therefore, it is clearly understood that the 1996 concession,
         and all of the rights thereunder, in addition to the concession
         granted on July 23, 1987, together with all of the precious
         metal ore reserves, are pledged as collateral to the above named
         parties, and also includes Sylvia Machulak, as an individual,
         and hereinafter referred to as SM.

         On September 6, 2002, at a meeting held with the El Salvador
         Ministry of Economy in the City of San Salvador, El Salvador,
         Central America, an agreement was reached to renew the SSGM
         exploitation concession/license for a period of 30 years under
         the 1996 revised mining law and thereafter amended.  The
         existing SSGM exploitation concession would be cancelled and the
         Renewed SSGM Exploitation Concession/License would be granted
         after compliance with the application requirements.  On
         September 26, 2002, Commerce submitted an application to the El
         Salvador Department of Hydrocarbons and Mines (DHM) for the
         Renewed SSGM Exploitation Concession/License consisting of
         1.2306 square kilometers for a period of 30 years.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 6 of 10 Pages


         Then, on November 6, 2002, Commerce filed a S.E.C. Form 8-K,
         which reported that on or about October 30, 2002, Commerce filed
         applications to obtain the New SSGM Exploration
         Concession/License consisting of 40.7694 square kilometers and
         for the Nueva Esparta Exploration Concession/License consisting
         of 45 square kilometers.

         On or about March 3, 2003, the Office of the El Salvador
         Ministry of Economy, through its DHM, delivered two
         concessions/licenses.  The Renewed SSGM Exploitation
         Concession/License for the extraction of precious metals from
         the SSGM consisting of approximately 1.2306 square kilometers
         for a period of 30 years should be granted.

         This concession is subject to certain procedural requirements
         such as providing advertisement notices in two of El Salvador's
         newspapers at different time intervals and two notices in the
         Diario Oficial newspaper.  Also, public notice has to be
         submitted to the mayor of Santa Rosa de Lima.  After, a waiting
         period, an inspection of the property is to be made by the DHM,
         and then a contract is entered into with the DHM and the
         concession/license is to be issued.

         On or about March 3, 2003, the DHM did issue a New SSGM
         Exploration Concession/License for the 40.7694 square kilometers
         of area surrounding the Renewed SSGM Exploitation
         Concession/License area.

         Commerce's Directors have on this date authorized and directed
         Commerce's Officers to assign all of the rights, titles, claims,
         remedies and interest it has in the following (Exhibit B):

         1.  The Joint Venture; and
         2.  The New SSGM Exploration Concession/License consisting of
             40.7694 square kilometers granted by the DHM of the El
             Salvador Ministry of Economy under its Resolution No. 27 on
             February 24, 2003; and
         3.  When issued by the DHM, the Renewed SSGM Exploitation
             Concession/License consisting of 1.2306 square kilometers.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 7 of 10 Pages


         to GLSCO, ELM, the ELM RIRA, the SM RIRA and SM, collectively
         and individually, as collateral for the outstanding loans as of
         March 31, 2003, and all future advances of any kind.  This
         substitution is authorized as the SSGM concession/license issued
         on July 23, 1987 and assigned to the lenders on October 19, 1987
         has been cancelled and is in the process of being replaced with
         the Renewed SSGM Exploitation Concession/License and the New
         SSGM Exploration Concession/License.

     d.  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, 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 spar e 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, included in the May 13, 2002 confirmation
         letter.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 8 of 10 Pages

3.   Cross Pledge Collateral Agreement

     GLSCO, ELM, the ELM RIRA and the SM RIRA 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 and the SM RIRA have the first right
     to the proceeds from the specific collateral pledged to each of
     them.  Commerce, its subsidiaries, affiliates and 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 and the SM RIRA.  The purpose and the intent of
     the cross pledge of collateral is to assure GLSCO, ELM, the ELM RIRA
     and the SM RIRA, 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, including SM.  The formula to be used (after deducting 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 derived from the
     excess collateral and then the amount due to each of them would be
     distributed.

4.   Cancellation of Inter-Company Debts Upon Default

     Since part of the collateral pledged to GLSCO, ELM, the ELM RIRA and
     the SM RIRA is 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.

5.   Guarantors

     This agreement further confirms that Commerce and all of the
     following are guarantors 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 and the SM
     RIRA.  Reference is made to Exhibit 7 included in the April 9, 1990
     confirmation letter.

<PAGE>

Mrs. Sylvia Machulak
President
General Lumber & Supply Co., Inc.
May 12, 2003
Page 9 of 10 Pages


6.   Re-Execution Agreement

     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 or collateral agreement,
     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 GLSCO, then GLSCO 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 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 and/or the collateral pledge agreement.

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.

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 12, 2003
Page 10 of 10 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,                 By:  Edward L. Machulak,
     Auth. Designee                           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,                 By:  Edward L. Machulak,
     President                                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,                By:  Edward L. Machulak,
     President                               President


Accepted by:

GENERAL LUMBER & SUPPLY CO., INC.


/s/ Sylvia Machulak
____________________________________
By:  Sylvia Machulak, President
Date:  May 12, 2003

<PAGE>



                    Exhibit A to Exhibit 99.1
    (Schedule of Principal and Interest as of March 31, 2003
          has been purposely omitted as it only reflects
         the calculations of the principal and interest.)


<PAGE>

                                EXHIBIT B


                                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 open-ended, secured, on-demand promissory
 note(s) issued by Commerce Group Corp. (Commerce) 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, all who reside in the
 County of Milwaukee, State of Wisconsin, individually and collectively
 referred to as "Note Holders," all of Commerce's rights, titles, claims,
 remedies, and interests in and to the Commerce/Sanseb Joint Venture and
 to the New San Sebastian Gold Mine Exploration Concession/License
 consisting of 40.7694 square kilometers granted by the Director of
 Hydrocarbons and Mines of the El Salvador Ministry of Economy under its
 Resolution No. 27 on February 24, 2003, and more fully described in an
 English translation (of which a copy is attached hereto and referred to
 as Exhibit 1) and Commerce further agrees to transfer, when issued by
 the El Salvador Director of Hydrocarbons and Mines, the Renewed San
 Sebastian Gold Mine Exploitation Concession/License consisting of 1.2306
 square kilometers, which application has been admitted by the El
 Salvador Director of Mines on February 28, 2003 (Exhibit 2), and the
 lease agreement by and between Mineral San Sebastian, Sociedad Anonima
 de Capital Variable, and Commerce dated January 14, 2003 (Exhibit 3).

     Commerce further acknowledged that Commerce's Directors unanimously
 adopted this Assignment by a resolution on May 12, 2003 and that the
 purpose of this Assignment is to provide collateral to the
 above-described Note Holders.

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

     Witness its hand and seal, this 12th day of May, 2003.

                              COMMERCE GROUP CORP.

                              /s/ Edward L. Machulak
                              -----------------------------
                              Edward L. Machulak, President

                              /s/ Edward A. Machulak
                              -----------------------------
                              Edward A. Machulak, Secretary

State of Wisconsin  )
                    )  ss.
County of Milwaukee )

     On this 12th day of May, 2003, 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

MINISTRY OF ECONOMY
Republic of El Salvador

RESOLUTION No. 27

DIRECTORATE OF HYDROCARBONS AND MINES OF THE MINISTRY OF
ECONOMY:  San Salvador at 9:00 AM of the day February 24, 2003.

Having seen the application presented the day of October 30,
2002 by Dr. Jose Antonio Alfaro Castro, adult, Lawyer, from
this city, acting in his capacity as General Legal Attorney for
the Company "COMMERCE GROUP CORP." through which it applies for
a minerals Exploration License called "SAN SEBASTIAN" of an
area of 40.77 square kilometers identified on the cartographic
sheet number 2656-IV NW, known as Santa Rosa de Lima in the
Department of La Union, and Nueva Esparta in the Department of
Morazan respectively.

CONSIDERING:

1.  That the application being found in legal format, in
    conformance to Article 38 of the Mining Law, an inspection
    was done in the requested area by Delegates of this
    Directorate the day of February 13, 2003 which turned out
    favorable;

2.  That the legal existence of the Company COMMERCE GROUP
    CORP.  is found to be proven in legal documents and the
    capacity with which Dr. Jose Antonio Alfaro Castro acts,
    and having complied with all of the requirements that the
    Mining Law Articles 36, 37 number 1 and Article 38
    establishes, and  at the petition of the applicant, this
    Directorate considers it procedurally correct to accede to
    what is applied for;

THEREFORE:

For what was stated above and in conformance to what is
disposed in Articles 4, 6, 13, and 19 of the Mining Law, this
Directorate:

<PAGE>

RESOLVES:

1.  CONCEDES an Exploration License for the exploration for
    minerals, specifically gold and silver, to the Company
    COMMERCE GROUP CORP. on the area called  SAN SEBASTIAN with
    a surface extension of 40.77 square kilometers identified
    on the cartographic sheets numbers 2656 IV and 2657 III
    known as Santa Rosa de Lima in the Department of La Union
    and Nueva Esparta in the Department of Morazan
    respectively, and whose technical description is the
    following: The project starts on vertex A whose coordinates
    are 278,000 latitude and 611,000 longitude this vertex is
    located on the land just on the peak of the La Calavera
    Hill at 700 meters to the Northeast of Las Marias Village
    and the North margin of the Las Marias River, from this
    vertex and with a straight North direction and at a
    distance of 6 kilometers is located vertex B whose
    coordinates are: 284,000 latitude and 611,000 longitude,
    this vertex is located in the El Raicero Village  to the
    South of El Tigre Mountain and North of El Conto Mountain;
    from this vertex and with a straight East direction and at
    a distance of 7 kilometers is located vertex C whose
    coordinates are 284,000 latitude and 618,000 longitude,
    this vertex is located between the East flank of the Los
    Caguamos Hill and the West flank of the La Pedregosa Hill
    and to the Southwest of the El Farallon Hill, from this
    vertex and with a straight South direction and at a
    distance of 6 kilometers vertex D is arrived at, whose
    coordinates are: 278,000 latitude and 618,000 longitude,
    this vertex is located on the East margin of the Santa Rosa
    River at 1.5 kilometers from the city of Santa Rosa de
    Lima, from this vertex and with a straight West direction
    and at a distance of 7 kilometers vertex A is arrived at,
    where the present description started.  The area described
    covers an area of 42 square kilometers from which are
    subtracted 1.23 square kilometers that correspond to the
    area of the exploitation concession applied for by the same
    Company, granting in t he requested Exploration License an
    area of 40.77 square kilometers.

2.  The Company in reference should comply with what is
    disposed in Articles 17, 18, 19, 21 and 22 of the Mining
    Law, its Regulations and other dispositions related to such
    activity;

3.  The Owner should start his exploration work in conformance
    to his technical program of exploration presented to this
    Directorate;

4.  The Exploration License is granted for a period of four
    years starting to count from the day following the
    notification of this Resolution, being able to expand and
    prolong it at the judgment of this Directorate for the
    period that the Law indicates;

5.  The Owner should pay the surface tax in advance during the
    first month of each year of exploration in conformance to
    what is established Article 9 fifth paragraph and 66 second
    paragraph of the Mining Law.

NOTIFY


                          SIGNATURE
                   GINA NAVAS DE HERNANDEZ
                          DIRECTOR


<PAGE>


                            EXHIBIT 2

MINISTRY OF ECONOMY
DIRECTORATE OF HYDROCARBONS AND MINES
REPUBLIC OF EL SALVADOR

DIRECTORATE OF HYDROCARBONS AND MINES of the MINISTRY OF
ECONOMY: San Salvador, at 8:15 AM of the day February 28, 2003

Admits the application presented the day of September 26, 2002 by Doctor
Jose Antonio Alfaro Castro adult, Lawyer, from this city, acting in his
capacity as General Legal Attorney for the Company "COMMERCE GROUP CORP"
through which it applies for a minerals Exploitation Concession,
specifically gold and silver, on a surface extension of 1.23 square
kilometers known as "SAN SEBASTIAN MINE" situated on the Hacienda San
Sebastian and San Sebastian El Coyolar, jurisdiction of Santa Rosa de
Lima, Department of La Union, identified on the cartographic sheet number
2656-IV NW, known as Santa Rosa de Lima and whose technical description
is the following:  Starting from the most visible point and of easy
access that is the Ochocientos Perez tunnel that constituted the main
entrance to the works of exploitation at its lowest point.  From this
tunnel and in direction to the South, twenty one degrees East and for a
distance of two hundred sixty two meters is located Station Zero that
constitutes the beginning of the perimeter of the concession.  Station
Zero is marked on the land by a marker of cement of fifty centimeters of
free or visible height and of square section whose sides are also fifty
centimeters.  Station Zero can also be located from the central part,
from the installations of the old mineral mill, access to Station Zero
one follows a narrow path or mule trail from El Comercio or the house of
Mr. Faustino Benitez with approximate direction of South West up to the
right or North margin of the Santa Rosa River approximately four point
five vertical meters above the bank of the river, Station Zero thusly
located, four more stations are located in a semi parallel line to the
Santa Rosa River.  Directions and distances from where is measured in a
direction to the South of forty eight degrees thirty minutes West with a
distance of three hundred fifty three meters sixty five centimeters.  In
order to facilitate of these stations are the following: From Zero
Station to Station One, in direction South sixty six degrees zero three
point two minutes West and a distance of one hundred twenty four meters
forty six centimeters, from Station One to Station Four, in direction to
the South, seventy nine degrees one minute West, and a distance of five
hundred six meters sixty eight centimeters.  In Station Four the
perimeter of the area of the concession changes direction to a general
direction of North-West and its different stations are located on the
Western sides of the San Sebastian, Salazar and Cosiguina Hills.  There
are sixteen stations with markers on this Western side of the concession
which are distributed on the "land" in the following manner: From Station
Four to Station Six, direction North, fifty two degrees thirteen point
two minutes West and a distance of one hundred sixty two meters twenty
one centimeters.  From Station Six to Station Eight, direction North
forty three degrees, twenty five point two minutes West, and a distance
of one hundred ninety one meters ninety two centimeters; from Station
Eight to Station Nine, direction North forty seven degrees twelve point
two minutes West and a distance of two hundred thirty five meters ninety
four centimeters.  From Station Nine to Station Ten direction North,
forty three degrees nineteen point six minutes West and at distance

<PAGE>

of forty five meters thirty centimeters; from Station Ten to Station
Eleven, direction North forty one degrees thirty five point one minutes
West at a distance of ninety four meters sixty five centimeters; from
Station Eleven to Station Twelve, direction North twenty three degrees
twenty point eight minutes West at a distance of forty two meters ten
centimeters.  From Station Twelve to Station Thirteen, direction North
twenty three degrees eight point three minutes West at a distance of
fifty four meters eighty three centimeters; from Station Thirteen to
Station Fifteen, direction North twenty three degrees thirty nine point
two minutes West at a distance of two hundred forty meters twelve
centimeters; from the Station Fifteen to Station Sixteen, direction North
twenty two degrees forty three point three minutes West at a distance of
one hundred fourteen meters ninety three centimeters; from Station
Sixteen to Station Seventeen, direction North twenty one degrees twenty
nine point six minutes West at a distance of one hundred twenty eight
meters thirty eight centimeters; from Station Seventeen to Station
Eighteen, direction North twenty seven degrees fifteen point seven
minutes West at a distance of seventy meters twenty seven centimeters;
from Station Eighteen to Station Nineteen, direction North thirty degrees
zero two point three minutes West at a distance of thirty eight meters
seventy nine centimeters; and from Station Nineteen to Station Twenty,
direction North seventeen degrees fifty one point one minutes West at a
distance of forty meters six centimeters.  The North limit of the
perimeter of the concession is delimited among the Stations Twenty to
Forty Four varying in direction between the directions North-East North
South and East-West approximately.  These variations are due principally
to the demarcation of the properties between the Hacienda San Sebastian
and the Hacienda Macay and in part to the broken topography of the land.
The twenty four marked stations on this North side of the concession are
located on the North and North West flank of the Cosiguina Hill, North
flank of the West Summit Hill and top of the East Summit Hill and
Conception Hill.  The distribution of the different stations on the land
is as follows: From Station Twenty to Station Twenty Two, direction North
fifty one degrees forty seven point two minutes East at a distance of two
hundred ninety six meters fifty centimeters; from Station Twenty Two to
Station Twenty Three, direction North eighty four degrees seventy eight
point five minutes East at a distance of twenty one meters four
centimeters; from Station Twenty Three to Station Twenty Five, direction
South four degrees twenty three point five minutes East at a distance of
one hundred eighty nine meters forty eight centimeters; from Station
Twenty Five to Station Twenty Six, direction South twenty two degrees
fifty four point one minutes East at a distance of fourteen meters sixty
eight centimeters; from Station Twenty Six to Station Twenty Seven,
direction South fifty two degrees thirty six point one minutes West at a
distance of forty four meters fifty five centimeters; from Station Twenty
Seven to Station Twenty Eight, direction South eighty nine degrees twelve
point two minutes East at a distance of sixty meters ninety eight
centimeters; from Station Twenty Eight to Station Twenty Nine, direction
North eighty three degrees fifty three point six minutes East at a
distance of fourteen meters and fifty seven centimeters; from Station
Twenty Nine to Station Thirty, direction South seventy degrees forty two
point five minutes East at a distance o f eighty meters fifteen
centimeters; from Station Thirty to Station Thirty One, direction South
sixty one degrees fifty five point six minutes East at a distance of one
hundred forty two meters seventy five centimeters; from Station Thirty
One to Station Thirty Three, direction South eighty eight degrees seven
point six minutes East at a

<PAGE>

distance of two hundred forty meters forty seven centimeters; from
Station Thirty Three to Station Thirty Four, direction South sixty one
degrees sixteen point four minutes East at a distance of fifty one meters
three centimeters; from Station Thirty Four to Station Thirty Five,
direction North seventy six degrees thirteen point six minutes East at a
distance of thirty nine meters seven centimeters.  From Station Thirty
Five to Station Thirty Six, direction North sixty eight degrees thirty
point six minutes East at a distance of twenty three meters; from Station
Thirty Six to Station Thirty Seven, direction South eighty eight degrees
thirty three point seven minutes East at a distance of one hundred seven
meters ninety four centimeters; from Station Thirty Seven to Station
Thirty Eight, direction South sixty five degrees fifty six point two
minutes East at a distance of one hundred ten meters ninety eight
centimeters; from Station Thirty Eight to Station Thirty Nine, direction
South sixty one degrees seventeen point four minutes East at a distance
of twenty nine meters thirty six centimeters; from Station Thirty Nine to
Station Forty, direction north seventy seven degrees forty two point
eight minutes East at a distance of one hundred eighty meters thirty
centimeters; from Station Forty to Station Forty Two, direction North
eighty five degrees forty three minutes at a distance of one hundred
seventy four meters sixty two centimeters; from Station Forty Two to
Station Forty Three, direction South eighty six degrees six minutes East
at a distance of one hundred eleven meters sixty four centimeters; from
Station Forty Three to Station Forty Four, direction North eighty one
degrees six point one minutes East at a distance of twenty two meters
sixty eight centimeters.  The perimeter of the concession is completed
upon uniting Station Forty Four with the starting Station Zero. This line
represents the Eastern limit of the concession and its stations are found
on the sides of the Eastern flank of the Conception Hill and the area of
the Migueles.  The original orientation of this North-East line and its
fourteen stations are distributed on the land as follows: From Station
Forty Four to Station Fifty Five, direction South fourteen degrees five
point two minutes West at a distance of six hundred sixty four meters
seventy two centimeters; from Station Fifty Five to Station Fifty Seven,
direction South sixteen degrees fifty four point four minutes West at a
distance of one hundred ninety six meters seventy one centimeters; from
Station Fifty Seven to Station Fifty Eight, direction South thirty
degrees three minutes East at a distance of fifteen meters ninety five
centimeters; and from Station Fifty Eight to Station Zero, direction
South two degrees fifty eight point seven minutes West at a distance of
thirty meters forty five centimeters. All of the stations or markers are
of cement of fifty centimeters of visible height and are of square form
whose sides also are fifty centimeters.

The exploitation of the mine should be done taking into account the
security measures necessary for the housing that is located within the
concession area requested and the housing that is located contiguous to
the exploitation faces should be relocated prior to the start up of the
exploitation activities.

In Open Pit exploitation operations (clearing, cutting and taking out the
material) the work faces should have manageable geotechnical and
geometric conditions, where the angle of stability or slope of the final
bank and the exploitation should be taken into account, stability of the
face of the bank and the foot of the bank, the width and height of the
banks will conform taking into consideration the geometrical properties
of the

<PAGE>

material that is being worked, at the same time control should be had of
the drainage system of the area of exploitation and influence through a
topographic model at a representative scale (1:100) that allows location
of engineering works for the management of surface waters and drainage of
acid waters from the mine, all of the above should be considered in the
design for the exploitation and execution, in such a manner that it
allows establishing the criteria for the factor of security for the
operators of the mine in the case that the bank caves in and the failure
of the bank does not cause the loss of human life and materials.

In underground exploitation, the workers should have access to
the surface through at least two different exits solidly
established, adequately signed, and easily accessible for the
workers in the interior of the mine.  The tunnels where work is
done should be equipped and maintained in such a manner that
the workers can work and circulate through them with minimum
risk, at the same time they should be signed to facilitate the
orientation of the workers. Adequate support should be placed
in the tunnels, except where the stability of the terrain does
not make it necessary for the security of the workers.  All of
the under ground access works authorized should maintain
ventilation and lighting adequately, that allows keeping a
sufficient margin of security and health for the workers.

To guarantee the security of the workers in the different
operations of exploitation of the mine, the workers should be
provided the instruments of security and the necessary
training, especially in the techniques of use, handling and
storage of explosives.

And in fulfillment of what is established in Article 40 of the
Mining Law, PUBLISH the corresponding notice.  NOTIFY.

                            SIGNATURE
                      GINA NAVAS DE HERNANDEZ
                            DIRECTOR


<PAGE>

                            EXHIBIT 3

NUMBER SEVENTEEN.   In the city of San Salvador, at sixteen hundred hours
of the day of January 14, 2003, before me Jose Antonio Alfaro Castro,
Notary, of this place, appears Mr.  Edward Leon Machulak, seventy six
years of age, Business Executive, of North American nationality, with
domicile in the city of Milwaukee, State of Wisconsin, United States of
America, whom I know and identify with ordinary passport number, acting
on one hand in his capacity as Legal Representative of the Company
"MINERAL SAN SEBASTIAN, SOCIEDAD ANONIMA DE CAPITAL VARIABLE, in his
capacity as President of the Board of Directors and on the other hand is
present at this same meeting in his capacity of Legal Representative of
the North American Company "COMMERCE GROUP CORP." organized in
conformance with the laws of the State of Delaware, United States of
America in his capacity as President and at the same time Legal
Representative and SAYS TO ME: that both Companies have agreed to hold
for/of common interest and convenience a LEASE CONTRACT which will govern
in the future by the following clauses and conditions that are mentioned
below:  I) DECLARATION OF DOMINION.  The company MINERAL SAN SEBASTIAN,
SOCIEDAD ANONIMA DE CAPITAL VARIABLE that henceforth will be called
MISANSE is owner of the rustic assets called Hacienda San Sebastian and
San Sebastian El Coyolar, inscribed under number One hundred Fifteen to
One hundred twenty one of Book Ninety five of the Property Registry of La
Union that are described as:  Hacienda Mineral San Sebastian, El Mango,
El Faro, El Manto, El Zalazar, El Zunzapote, Consuelo and La Granadilla,
property which is situated in the jurisdiction of Santa Rosa de Lima,
Department of La Union and borders in its entirety:  to the East with the
Hacienda de Arias, to the North with lands of Saturnino Flores and the
Salvadores; to the West with the Hacienda Trompina, and to the South with
the Camarones River and lands of Candelaria Albornoz, being this property
by nature rustic; five rights to lands that belong to the company in
undivided land rights on the Hacienda San Sebastian Coyolar by nature
rustic and at the point El Aguacate going toward the ravine of the
Ujustes in the jurisdiction of Santa Rosa de Lima, Department of La
Union, bordering said Hacienda, in the East with the Hacienda Santa Rosa,
to the South with the Hacienda Candelaria Albornoz; to the West with the
Hacienda San Jose Velis and to the North with the Hacienda El Coyolar;
four undivided rights to the Hacienda San Sebastian being the surface
capacity of three rights of thirty manzanas or that is about two thousand
one hundred areas, and the borders of the entire Hacienda San Sebastian
are: to the North with Hacienda El Coyolar, to the South with the
Hacienda Candelaria Albornoz; to the West with lands of Pablo Melgares
and to the East with lands of Santa Rosa; seven tenths of a land of about
eighty manzanas of capacity, of a rustic nature, located in the place
called San Sebastian, under the title of Hacienda El Coyolar, in the
points called Paso del Ujuste de Nogues, Lomas de Capalillo and Pena de
Zopilote of the jurisdiction of Santa Rosa, Department of La Union,
bordering: in the East with lands of Victor Escobar, Antonio Marcia and
Francisco Ferman, in the West with lands of the succession of the
deceased Matias Conde and Butter Salvador Mines Inc. Ltd., to the North
with lands of Reyes Ortiz and Ireneo Andrade and to the South with lands
of the cited Company.  Two lands by nature rustic included under the
title of the Hacienda El Coyolar located in the jurisdiction of Santa
Rosa de Lima, Department of La Union and in the place called San
Sebastian, the one of about forty manzanas that is twenty eight hectares
bordering; in the East with lands of Anita Lazo, to the North with lands
of Salome Melgares, river in between, to the West with lands recognized
by Victor Fuentes; and to the South with lands of Ambrosio Flores and
Evelina Herrera, before Santiago Melgares, on which land as was said is
rustic, the other land has a capacity of about eleven hectares and twenty
areas and are two tenths part of a land that in its entirety borders; on
the East with lands of Messrs. Victor Escobar, Antonio Marcia and
Francisco Ferman; in the North with lands of Reyes Ortiz and those that
were of Ireneo Andrade; in the West with lands that belonged to the
successors of Matias Conde; and in the South with lands of Butter
Salvador Mines Limited, all in the Hacienda El Coyolar.  Within the
perimeter of the lands of the related properties there exists eight mine
portals called: the first Seiscientos Miguel, the second Cuatrocientos
Miguel, the third Trescientos Taladron, the fourth Santa Elena, divided
in numbers one and two, the fifth Cien Limon, the sixth El Aceituno, the
seventh El Cino and the eighth Trescientos Miguel and others that are
abandoned and whose name has not been able to be identified.  On said
properties are found  the mines "San Sebastian", "Seiscientos Miguel",
"Cuatrocientos Miguel", "Trescientos Miguel", and "Trescientos Taladron",
"Santa Elena Numero Uno", "Santa Elena Numero Dos", and "Cien Limon", "El
Aceituno:, "San Sebastian", "El Mango", "El Faro", "El Manto", "El
Salazar", "El Sunzapote", "Consuelo", "La Granadilla", "Aurora" and
others that do not have a name or denomination.  Over said mines MISANSE
has mining rights or ownership, some of which are stated in the
certifications of the acts of granting the concession, and delivery and
possession of mines, surveyed in the District (Canton) of San Sebastian,
jurisdiction of Santa Rosa de Lima, Department of a Union, inscribed in
the Book of Advice of the Department of Economic Promotion of the
Ministry of Economy, the first at twelve hours of the twenty fourth of
November of One thousand nine hundred sixty one to the Folios nineteen,
twenty and twenty one, and the second at twelve hours on January 12, 1962
(one thousand nine hundred sixty two), to the Folio twenty three to
twenty four.  II) DELIVERY UNTO LEASING OF THE OBJECT OF THE CONTRACT.
The Company MISANSE, the lessor,

delivers and gives in character of leasing through this document to the
Company COMMERCE GROUP CORP, that will be called the "lease holder" and
the latter thus receives all the mining items and rights that correspond
to it over the mines mentioned before, as well as over all of the others
over which claims would have been made or of having had any other right
of exploitation or exploration within the area of the lands described
before and those that are adjacent or contiguous, as it is the purpose of
both companies that within the lease all the mines remain included that
exist within the area of the same lands  described before or adjacent
ones.  III) RIGHTS OVER DISCOVERY OF NEW VEINS IN FUTURE EXPLORATIONS.
It is agreed by both parties that if in the course of the explorations on
the included lands and that are property of the lessor, new veins are
discovered the lessor will follow the corresponding paper work in
accordance with the requirements of the law in this material and in the
mining works and labors, the lease holder will employ preferentially the
members of the lessor that know this kind of mining labor and the
expenses will be on the account of the lease holder.  IV) USES AND RIGHTS
THAT THE LEASE COVERS. The lease covers the right of use of all the lands
necessary for the construction and use of buildings, for offices, mills
and operations, rivers and wells that were or that are opened in the
future, as well as also the transport, loading and unloading of the ore,
use of roads or construction of new roads necessary for the mining work
and any other type of similar need for the works of exploration or
exploitation of the metallic or non-metallic mineral deposits.  It is
agreed that the lessor will give facilities to the lease holder so that
there are no obstacles in the mining works and especially that there not
exist the intermission of third parties that create obstacles to said
mining labors.  V) OBLIGATIONS OF THE LESSOR.  MISANSE may not during the
validity of the term of the LEASING, LEASE OR SUB-LEASE the lands
included and that have been referred to previously, to give them in loan
or use or constitute duties on them.  VI) TERM OF THE LEASE.  The term of
this contract is for thirty years starting counting from the day that the
Directorate of Hydrocarbons and Mines of the Ministry of Economy grants
the authorization for exploitation that is now found in processing and
will be extendable for one or more equal periods, always and when, the
obligations are fulfilled that emanate from this contract and are
contained in the stipulated clauses, and in the case of not continuing
the lease will communicate in writing with sixty days of anticipation of
termination of the initial term, or for its extensions, its desire to
have it terminated.  VII) PRICE AND FORM OF PAYMENT.  The lease holder
will pay to the lessor as the price of the lease a sum of money
equivalent to FIVE PERCENT of the net sales that are obtained from the
exploitation of the mines based on the market price, annual; that in no
case will the payment be less than THREE THOUSAND COLONES per month; the
lessor will have the right to the lease holder informing him each
semester about the production and other data relative to values, price
and marketing of the production. VIII) RIGHTS AND OBLIGATIONS OF THE
LEASE HOLDER.  The lease holder will carry out the work of exploration
and exploitation under its own account and risk and in accordance with
its economic possibilities and will use the technical methods required
for such an end; have legal security during the term of the lease that
there will not be actions that make difficult the process of production,
as well as any kind of interruption on the part of third parties or by
the lessor himself.  The lease holder at his own discretion may cede or
pass to third persons t he rights derived from this contract without it
being necessary to get the permission of the lessor after fulfilling the
requirements that the law establishes.  IX)  CAUSES FOR TERMINATION OF
THE CONTRACT.  The present contract will be cancelled for the following
reasons: a) when the lease holder stops paying the agreed price in the
way in which it was stipulated, b) through cancellation of the concession
before the term granted, c) for non-compliance with the obligations
contained in the present contract, d) if the Government of El Salvador
declares the concession worn out and finished or cancels it before the
stipulated term, e) because the lease holder suspends the exploitation of
the mines for the term that the Mining Law establishes, except for force
majeur or a fortuitous case duly proven in the judgment of the competent
authorities.  X)  It is understood that at the end of the original
concession or of its extensions as the case may be, the mines,
improvements, and everything existing in them will return to the domain
of the lessor without his having to indemnify the lease holder.  To carry
out its work the lease holder under its own responsibility and cost will
import the materials, apparatus, equipment, tools, vehicles, spare parts,
office equipment, chemical products and other kinds of substances needed
for the processing of the minerals and production, in addition it will
enjoy those benefits that the laws grant for this class of activity in
conformance with the Agreements that the corresponding and competent
organizations issue.  XI)  The Government will supervise the process of
exploitation or exploration of the minerals through the Directorate of
Hydrocarbons and Mines of the Ministry of Economy, the Ministry of the
Environment and Natural Resources with the end that the regulatory
dispositions in the material be fulfilled, as well as also the other
organizations of the State concerning the marketing, export and other
processes necessary for the production of the extracted minerals.  For
the performance of its functions, the competent officials will have free
access to the installations of the mine to prove truthful compliance with
the regulatory dispositions, as well as also to obtain the information
necessary for that end.  XII) Any disagreement that results from the
interpretation of the present contract and that could not be resolved
through direct dealing by the contracting parties; will have a maximum
term of thirty days starting on the day on which the problem came up,
otherwise this will be by means of arbitrators that will be named one
each by the parties, within


<PAGE>

ten days following the date that one of them notifies the other in
writing of his intention to resolve the case through arbitrators; if the
required party does not do it, in its absence said naming of an
arbitrator will be made by the First Mercantile Court of San Salvador
within the term of ten days of receiving the injunction, and the decision
of the arbitrators will not be subject to appeal.  The lessor will leave
without effect any other contract that it may have agreed to previously.
For the legal effects of this contract the contracting parties indicate
as special domicile that of this city and to the jurisdiction of whose
tribunals they expressly submit.  Thus the declarer expressed in his
capacity as Legal Representative of both Companies and I, the signed
notary, Swear: a) Being legitimate and sufficient the character with
which he acts for the Company MISANSE for having had in view: a)
Attestation of the publicly registered Constitution of MINERAL SAN
SEBASTIAN, SOCIEDAD ANONIMA granted at twenty hours of the day May 8th,
1960 before the services of the Notary Miguel Angel Aparicio and
inscribed to Number One of the Commercial Registry that was carried out
during this year in the First Instance Court of Santa Rosa de Lima; b)
Attestation of publicly registered Modification granted at nineteen hours
and thirty minutes of the day January 25th, 1965 before the services of
Notary Jose de la Paz Villatoro, inscribed to Number twenty five of Book
Sixty One of the Companies Registry of the Registry of Commerce where the
social capital was increased, and whose denomination is that indicated,
that the President of the Board of Directors is the Legal Representative
who can sign contracts such as the present one with the authorization of
the Board of Directors.  c) Attestation of publicly registered
Modification granted in this city at seventeen hundred hours of the day
November 11, 1986 before the official services of Notary Roberto Romero
Pineda, inscribed to Number One of the Book Five Hundred Forty Four of
the Registry of Companies of the Commercial Registry; d) Attestation of
publicly registered Modification granted in this city at twelve hours and
thirty minutes of the day February 8, 1990 before the official services
of the Notary Roberto Romero Pineda, where it was transformed from fixed
capital to variable capital, inscribed to Number Thirty Three of the Book
Seven Hundred Eighty Six of the Companies Registry of the Registry of
Commerce; e) Attestation of publicly registered Modification for increase
of social capital, granted in this city at seventeen hundred hours of the
day March 31st, 1994, before the official services of the Notary Sandra
Margarita Bennet Herrarte, inscribed to Number Thirty Seven of the Book
One Thousand Fifty Two of the Companies Registry of the Registry of
Commerce; B) Certification of the Minutes (Acta) number Five General
Ordinary Meeting of Shareholders held the day of January 12, 2003 from
which it is shown that Mr. Edward Leon Machulak was elected President of
the Board of Directors for the period of one year.  C) Certification of
the sole point of the Minutes of the Session of the Board of Directors in
which it is authorized to the one appearing to sign in the name of the
Company, the present contract, both issued by the Secretary of the Board
of Director s, Engr. Luis Limay Pita, still not inscribed in the
respective register. II) Being legitimate and sufficient the character
with which he acts as Legal Representative of the Corporation, COMMERCE
GROUP CORP. having had in view:  a) the attestation of the public
registry of the Constitution of COMMERCE GROUP CORP. incorporated in
conformance to the laws of the state of Delaware, the day of September
14, 1962 and the articles that govern it.  In said registered document it
states that the President is the Legal Representative and has the
capacity to grant acts such as the present one.  Certification of
election of the President where Mr. Edward Leon Machulak was elected for
a period of three years, said nomination being in force. Said documents
are written in Spanish.  I explained the legal effects of this instrument
and read as I could, entirely in a single act ratify its contents and we
sign.  I SWEAR. Between lines-I-always-wanted-The Lessor leaves without
effect any other contracts that have been agreed to previously. - General
Ordinary Shareholders' Meeting. Valid-Amended-the
assets-operation-construction-net
sales-that-earnings-transformed-appearing before-this-construction-Valid.
Between lines-that in no case will the payment be less than THREE
THOUSAND COLONES per month-Valid.

/s/ Edward L. Machulak           /s/ Jose Antonio Alfaro Castro