Mr. Michael McPhie reports

SUPERIOR COURT OF ARIZONA GRANTS MOTION TO DISMISS LAWSUIT

The lawsuit brought forward by certain parties against Curis Resources Ltd. and the Arizona Department of Environmental Quality (ADEQ) challenging the validity of regulations governing individual aquifer protection permits (APPs) has been dismissed. The ruling, authored by Judge Arthur T. Anderson of the Maricopa County Superior Court in Arizona, dismisses the case with prejudice, effectively acting as a judgment on the merits in favour of Curis and ADEQ.

"We are pleased with the decision to dismiss what we believe to be a frivolous and ill-advised lawsuit brought forward on very questionable grounds," commented Rita Maguire, senior legal and government affairs adviser to the chief executive officer and board of directors of Curis. "The review process for the permit for phase 1 operations of the Florence copper project is both exhaustive and inclusive. The APP regulations ensure the safety of the public and the environment, and guarantee public involvement in the permitting process."

"The dismissal validates the authority and integrity of the environmental review process for Aquifer protection permits in Arizona," stated Dan Johnson, vice-president, environment and technical services and general manager with Curis in Arizona. "Both ADEQ and the United States Environmental Protection Agency have extensive experience in protecting groundwater through the permitting process, and Curis will continue to work with both agencies to ensure the safety of the project."

"We see this decision as another strong vote of confidence in the governmental permitting processes which ensure the safety of the Florence copper project," commented Michael McPhie, president and chief executive officer of Curis. "We look forward to continuing a respectful and meaningful dialogue around a project that will contribute to the quality of life of the citizens of Florence, Pinal county and the state of Arizona."

Background

The lawsuit against ADEQ was filed by Southwest Value Partners Inc. of San Diego, Calif., Johnson Utilities Inc. of Queen Creek, Ariz., and other plaintiffs, which sought to prevent ADEQ from issuing an APP to Curis for the project. The lawsuit alleged that ADEQ exceeded its statutory authority by creating a rule governing individual aquifer protection permits of limited duration, known as temporary APPs. Curis joined the lawsuit and filed a motion to dismiss with prejudice on the grounds that state law granted ADEQ the authority to create the regulation. The court agreed with Curis, finding that the regulation governing temporary APPs "constitutes a valid exercise of ADEQ's rulemaking authority." The dismissal with prejudice will prevent the plaintiffs from challenging the validity of the temporary APP program in any administrative appeal of the Curis permit.

We seek Safe Harbor.