From the Roxmark MD&A filed on Tuesday along with Q2 financials on Sedar:
During the period, the Company has been carrying on its activities in the Beardmore Camp.
As part of its risk diversification strategy, Roxmark is developing properties that contain
primarily molybdenum ore and gold.
The 2006 strategic plan includes:
• Extracting a representative sample from the main molybdenum vein at the Nortoba-
Tyson property for additional metallurgical testing. This will assist in fine-tuning the
mill to process molybdenum for sale on world markets;
• Completing the set-up and equipment installation at the mill begun last year, as
necessary to prepare for molybdenum throughput;
• Extracting a 3,000-ton bulk sample of molybdenum to complete evaluation of the
commercial potential of resources at Nortoba-Tyson and to generate significant
revenue from concentrate sales to support other aspects of our program, while
reducing shareholder dilution;
• Assuming positive results from the bulk sampling and milling, proceed immediately
with preparation for underground development of molybdenum;
• Completing a scoping study on three of Roxmark's formerly producing gold
properties—Magnet, Northern Empire, and Sand River-Leitch—to select one as a
focal point for further exploration and development.
Resource Properties
For the acquisition of the Coté property, the Company paid $10,000 and issued 50,000
common shares of the Company during January 2006. To date, a total of $30,000 has been
paid in cash and 100,000 common shares of the Company issued to the vendors of the Coté
property adjoining the Nortoba-Tyson. The Nortoba-Tyson molybdenum and gold property
was acquired in August 2004. To date, the cost of acquisition has been $25,000 paid to the
vendor.
In addition to the molybdenum properties, the Beardmore camp contains the Northern Empire
Mine, Sand River Mine, Leitch Mine and the East Leitch property, the latter three being
contiguous.
The remaining resource property holdings are located in the Geraldton Mining Camp and
include the Magnet Mine, McLellan Joint Venture, Bankfield Mine, Little Longlac Mine,
Algoma Lease and the Placer Dome-Key Lake property, all of which are contiguous. A
detailed description of these properties is listed in Note 3 of the audited financial statements
for the year ended December 31, 2005. The Company does not have any long-term
contractual obligations other than property lease payments to the Crown.
Costs related to the acquisition, exploration and development of resource properties are
capitalized by property until the beginning of commercial production. Should a property be
sold or abandoned, the capitalized cost related to that property is written off. During the
period, $26,500 (2005 - $85,423) was capitalized for the cost of resource properties.
Overview of Performance
The Company is continuing with the development program that commenced in the year 2005
on the Nortoba-Tyson property. As a result of the drilling program of 2005, the Company
delineated two areas that will be marked for the surface bulk sample: the first area is located
under trenches 4 through 7; the second is under trenches 1 and 2 which have a historical grade
of 2.48% MoS2 over 2.07 feet. It is worth noting that the historical average grade from the
previous drilling and trenches was 1.73% MoS2 over 3.0 foot width – similar to the returns
received from the 2005 drilling program.
Subsequent to quarter end, the Company appointed the mining contractor Lakeside
Manitouwadge Ltd. to carry out the extraction of 3,000 tons of surface bulk sample at the
Nortoba-Tyson Molybdenum property. Removal of overburden and waste rock commenced
early in August.
The permits for the extraction of surface bulk sample and processing of the ore at the Northern
Empire mill have now been issued and obtained from the governmental agencies. The process
of obtaining permits for the underground development of the moly property is continuing and
permits are expected to be issued shortly. The closure plan for the molybdenum property has
been filed with the governmental agencies. The fully permitted mill is ready to process moly
and gold. Processing the molybdenite material will start shortly at the mill. Preliminary
results from Lakefield Research on the metallurgical tests indicate more than 90% recovery of
MoS2 concentrate. Subsequent to processing the bulk sample, the mill will be available for
custom milling until the completion of the underground development.
An agreement was reached with U.K.-based Derek Raphael & Company Limited for the
purchase of concentrate to be produced this year. Concentrate from processing the bulk
sample will be delivered to the port of Montreal, P.Q.
During the first quarter ended March 31, 2006, the access road to the bulk sample area was
completed with the installation of a 40-foot bridge. Additional road improvements will be
carried out as needed.
The digitization of all recent and historic data on Roxmark’s gold properties, including 3-D
modeling of key areas, is being carried out under the supervision and direction of SRK
Consulting Engineers and Scientists (Canada) Inc. The work is being performed on the
Leitch-Sand River Gold, Northern Empire and the Magnet mines. The program is a key
element in a scoping study on each of the gold properties. It is anticipated that at least one
property will be selected and development commenced leading to production. Historic
production from the Leitch property before it was closed in the 1960s was 860,648 ounces of
gold produced from milling 906,395 tons at an average grade of 0.91 oz./t of gold. The
Geraldton- Beardmore Gold Camp produced 4.1 million ounces of gold when these mines
were in operation. |
