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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: AlphaRomero who wrote (64825)	4/13/2009 10:54:02 AM
From: niceguy767	Read Replies (1) of 78424

Answer to your dilemma is here: Q. 2 Mining MarketWatch: What type of expenditures are coming up to get the mill and underground to where you want it to be, could you have done it on cash flow alone, and I assume you are capitalized well enough now to get to where you want to be? Ronald Perry, VP & Treasurer Metanor: "With regards to the mill upgrades necessary to get where we want to be -- the key is we can now proceed, we can now go and issue contracts and we don’t have to worry about whether we will have the money – we have it. When you operate a business do you want to take the risk? - Not knowing where the capital markets will be. We can’t count on cash flow. What we did was the prudent thing. It is dilutive, but look what we’re bringing onboard with Eric Sprott and Goodman & Company. We are currently at 800TPD and are taking it to the next stage. We raised CDN$12M, we had a ~CDN$2M on hand and we still have a line of credit available. We budgeted CDN$5M to take the mill from 700 to 1200TPD, we did do from 700TPD to 800TPD for well under $100K so we don’t think we will be using the full $5M. We are going to do the headframe at ~$1.5M, hoist room ~$1.5M, the shaft sinking budget for 2009 will be about $4.5M, other work at Bachelor is about $3M. We have money available to do all this work now and we will proceed to award contracts. We pride ourselves on improving on consultant estimates and budgets and always try to do so; one of the contracts was about $1.5M and we are going to be awarding it for about $1M plus taxes. The point of doing things the way we did is that it secures our future. Going from cash flow alone to progress underground we wouldn’t be awarding all these contracts as it would have taken much more time, and we felt the time is ‘now’." I suppose one can read this as "fluff", but it makes sense (to me) within the context of their 70,000 ounces goal for July /10.

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