What milestones are the company looking to reach over the next year?
A: The current focus on Ashdown will next advance to the re-start at MR as Ashdown’s production continues to stabilize over the coming months. Our goal in the last PP was to leverage value through low cost means including the re-establishment of reserves at MR by updating its feasibility study. This feasibility work is underway and involves several months to complete and can cost upwards of half a million dollars. Its success can bring 200,000 ounces of gold back onto the books, and at over $800 per ounce, this represents a significant asset. Similarly, we have negotiated leveraged settlements on several of our legacy debts and reclassified a large portion of those monies into capped NSR payments, greatly enhancing control over our cash flow. We have also successfully resolved all legal disputes inherited as legacy issues, and have no lawsuits pending. We extinguished over $6MM in debt, leaving our balance sheet in good condition compared to where we were two years ago. Our next challenges involve our listing, our share capital structure and identifying the next mine opportunity beyond MR and NC.
Q: It’s been over six months since the PP with Sprott. Will you please comment on how that relationship has been progressing.
A: Sprott took a major position in the Company during the last PP, and were supporters of GPXM’s ballot initiatives at the AGM. Sprott’s market presence and the leadership they offer through their participation in the PP is part of a strong foundation as we prepare the Company for entry into the Canadian markets through listing on a senior board there. It is our goal to see this relationship grow as we ramp production of moly at Ashdown and prepare Mineral Ridge to re-enter the gold market after a three year hiatus.
Q: Can you comment on the current situation with WEX? Why has the dispute dragged on? Wasn’t the LLC set up to make these types of disputes easily solved? Have any dates for resolution been set? Please also comment on WEX’s claims against GP.
A: The LLC was set up to define the resolution of disputes through binding arbitration. Binding arbitration is designed to accomplish this by laying out a step-by-step process that leads to a fair - and final - decision by a qualified third-party outside the formal court channels. In many ways, it operates like a court, but with less potential for delays. Nonetheless, it still involves the use of lawyers for each side, and can be subject to various motions and actions which take time. It also involves the selection process for the arbitrator as well as requires the parties to attempt to mediate their issues first, which takes additional time. In this case we are finally approaching the last steps in the process, and expect this matter to be resolved within the coming months. The Company does not regard the counter-claims as substantive. We welcome a final resolution as soon as the process will allow.
November 15, 2007
Q: What is the current status of Mineral Ridge and what are the short and long-term plans for this property?
A: MR is a diamond in the rough. From the outside it appears to be a three-strikes property due to three consecutive attempts by three different companies to heap leach what was a proven vat leach operation with over 600,000 oz of gold production to its credit. In reality, when approached as a milling and vat leaching operation the preliminary numbers look to be very robust. These are now being reviewed by third party experts to determine putting the property into profitable production. The exploration potential on the property is outstanding. We expect our in-house work to be validated by the third-party feasibility work, and to then further expand the current resource significantly through infill and step out drilling over the next two years.
Q: Please comment on the possible expansion of Ashdown milling capacity to 200 tons per day. It has been noted there is mineralization at surface on the Ashdown property. Has open pit mining been assessed and wouldn’t this be easier than mining underground?
A: The expansion of the mill capacity is a function of the ability to mine and deliver ore on a sustainable basis. We have been examining the possibility of an expansion and beginning the permitting process so that we can be ready to pull that trigger as soon as it make sense. For the immediate future, management is concentrating on ramping up production to the full capacity of the existing mill. The underground development is really the step that will determine the feasibility of an expansion. As far as open pitting this deposit goes, it is unlikely that the known mineralization would warrant the permitting lead time and capitalization required to convert to a pit. The narrow high grade nature of the vein is ideal for the surgical approach taken. Having said this, if exploration drilling discovers mineralization of significantly different tenor and geometry, the optimal mining method will be re-examined.
Q: What is the current status of the 43-101? Why has this report taken so long to put together? What resources are being used to compile the data and can we expect drilling on the property in the near future?
A: The feasibility study that underlies the NI 43-101 report is finally winding up, with the last of the engineering related to the mine plan being conducted over the next few weeks. The length of time has been driven by the fact that we opened the mine before we had any of the background work completed, and we have had to put all of this preliminary work into place in order to complete the economic analysis and forecasting. Ironically, this work will basically confirm the feasibility of a mine that has already been proven through actual production. The value of the study is in providing institutions and analysts with documented reserves and ore cut off grades. The fact that we have "proven" the economics will help the QP’s when they apply their stamps to the final reserve numbers in that they are not having to guess and take the chance that they missed something.
Q: What is the current status of the Gradient work that’s been done on the property? The June 12th PR reported collection of field data with the results to be analyzed over the next couple of weeks. That was five months ago. What are the results?
A: The work that Gradient Geophysics did for the project was taken to the preliminary stage of interpretation in the weeks following the gathering of data, and subsequently was held up due to difficulty in coordinating their schedules with our geologists to refine the models. After many attempts to make this happen, we have taken receipt of the raw data and contracted with a third party to complete the interpretive work on the inversions and constraining the models prior to targeting drill holes based on the results. This work will take several more weeks, and the results will be discussed when available.
Q: The OTBB exchange sucks. When can we move somewhere legit and what steps have been identified as necessary before a transition can occur?
A: Management recognizes the importance of migrating to senior trading platforms, and views the US and Canada as the two most desirable jurisdictions to do business in. The Company qualifies for the full Toronto Exchange (as opposed to the TSXV) and for the AMEX in all but our share price. The AMEX requires a minimum price of $2.00, which can either be accomplished through organic growth in value or through some form of business combination or consolidation event that would result in creation of that value. This is a primary focus of the Company, and the recent authorization for an additional 250MM shares has placed us with the flexibility to take advantage of the right opportunity as it presents itself over the coming year. |
