Subject: Nolan Deposition: Day 4
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Date: Thu, 20 Jul 2000 15:40:00 -0700 (PDT)

Kathy concluded her questioning today and continued to focus on 
engineering/management problems with the mill. Highlights:

--As configured, Nolan felt that the mill could not produce 1.35 million 
metric tons as projected in the Offering Memo.? Nolan felt that a more 
accurate number was 1 million metric tons.

--The static var controller (electricity related) was struck by lightening 
resulting in the mill being shut down for about 3 months.? If NSM had money 
for spare parts, a new SVC could have been purchased.

--Nothing prevented SDI personnel from checking the engineering of the plant 
before the offering. 

Cory Gordon of Robins, Kaplan began is questioning late this afternoon.? 
Gordon went straight to the off-take agreements.? Apparently SDI had its own 
off-take agreement with Pruessag that contained the type of language which 
was described in the offering memo-- i.e., Pruessag was obligated to purchase 
a guaranteed amount of steel at certain qualities each month/year.? By 
contrast the NSM/Pruessag off-take agreement did not impose any such 
obligation on Pruessag.? (Gordon will contiue with this area tomorrow)

Enron/ECT was not mentioned much today. 

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