All,
Some questions about BCMD, based on the Strandburg report.
The report gives an estimate using the terms "Eastern Melones Fault" and "Western Melones Fault".
Question: What is the relationship of BCMD's properties and these two faults?
Do the properties completely emcompass the fault, or are there sections of the properties that lie outside the fault?
There are four mines / mine groups listed in Strandburg's report:
1. Upper and Lower Brush Creek
2. Kate Hardy
3. Ruby-Cincinnati
4. Carson
The report gives an estimate of 3128K ounces of gold. Assuming that each of the four mines contain 1/4 of these inferred resources, then we have each mine containing about 782K ounces of gold. Of course, there is no way of knowing the actual amount for each - this is just an estimate for discussion purposes.
The company currently has permission from the United States Forest Service to transport only 30 tons per day of ore from the Lower Brush Creek mine to the Ruby mill site ( permission obtained June, 1997 ).
Question: What is the processing capacity of the Ruby mill?
At 30 tons per day, 30 days per month, the mill would only process 10.8k ounces of gold per year. At this rate, it would take 72 years to work just the one mine.
Clearly, additional capacity is needed - both for ore extraction and milling. This is noted in Strandburgs report on Page 4, where a 250 tons per day mill expenditure of $9.5 M is noted.
Question: When will this mill be constructed and how will it be financed?
How will this mill be located with respect to the 4 mines?
Question: What is the theoretical maximum ore extraction rate for each of the mines? Are there any sort of limitations on this rate due to the physical location of the mine, the internal structures of the mine, or due to earlier work done at the mine for gold extraction?
The company talks about gold being in "pillars" in the mine.
Question: Are these pillars required to retain the structral integrity of the mine? If so, how can one mine material from them without sacrificing the structural integrity of the mine? Will removed pillar material have to be replaced by new structural supports, such as steel or wood timbers? What is the cost of such work? Is this even feasible?
Assuming that a 250 ton per day mill is constructed and that the 4 mines can support a combined extraction rate of 250 tons per day, then assuming a 30 day month ( probably not reality ), an extraction rate of 90,000 tons per year can be assumed. Assuming a mill recovery rate of 90%, then we have, hopefully, 81,000 ounces of gold per year.
Using these figures and a total inferred resource of 3182k tons, it will take approximately 35 years to extract all of the ore.
Question: Is there a practical time limit to a project such as this? In other words, is 35 years too long a timeframe for such a project? If it is, then more milling and ore extraction capcity must be added.
For example, the McDonald Gold Project in Montana has reserves of 3700K ounces of gold, and 8000K ounces of silver, and their project life is only 15 years.
The Strandburg report gives an inferred resource of 1 ounce of gold per ton. Yet, the following text is taken from the S-3 filed on 12/22/97:
"From February 1992 when the Company began limited production at the
Ruby Mine to December 1992 when the Company ceased production due to
inclement weather, the Company milled approximately 7,300 tons of
mineralized placer material and recovered approximately 200 ounces of gold,an amount which is inconsistent with historical production at the Ruby Mine in the early 1940's."
Question: Why were only .03 ounces per ton extracted from the Ruby mine?
Why the descrepancy between this actual mining work and the
Strandburg report?
Is this an indication of the "real" amount of gold left in these properties, as opposed to the report?
Finally, the following general questions:
When will the investors get some sort of production implementation plan which details some of the important metrics of this mining operation on a mine by mine basis? Jim Chapin apparently has the time to escort people on mine tours - why doesnt he have the time to put together a reasonable business plan for his investors? Is this a real business or just a bunch of mining wannabe's playing with some toy mines? And, when will we see some realistic press releases from this "company" giving some real data, not "5 gallon buckets" and pictures of gold buttons?
The people at the McDonald project sound like they know what they are doing. Here is the URL:
montana.com
Note that this is only one of dozens and dozens of "real" gold mines.
Any informed discussion of the above would be helpful to me to better understand BCMD's value to me as an investor.
Regards,
Dr. Bob |
