Dont give up... We are soon at our goal :

I dont know where your mtlFX.c is. The location seems to differ
between GameStudio dowloads. However.

Search you GameStudio directory and its subdirectories for mtlFX.c.
Once you found it you may do one of two things.

Either copy the mtlFx.c file to your project directory OR
set the PATH in terrain.c to point out the directory where you found the mtlFX.c

Kindly
~Roland