In response to two recent queries:
Jan. 13: Greg when are we gonna start to see some drill results, that you promised us months ago? Financing, when will it be completed? HAve you guys raised any funds for it yet?
Jan 14: Greg could u comment on the latest news? I'm having a trouble
understanding what potential if any lies in the numbers reported
today. Not being an expert on this subject like many other shareholders I'm sure we'd appreciate more detail in terms we can understand.
Have the reserves been increased atr Santa Cruz. I think last year YRI stated that there was over 4mm ounces of gold and over 1mm ounces of gold there. Have these #'s been increased?
THANKS
ps. I hope the site visits work out better than the ones in the past,
and we can get a senior on board with a fair deal to all.
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Sir:
You have just seen the first release with results from Santa Cruz Vanguardia. I'll have another release in a day or two on another area and the next quarterly, including a project update and details of our operations, cutbacks etc will be contained in it. I hope to have it mailed and posted by the end of the week on our web site.
I'm sorry that we haven't had more results but we are working on them as best we can under the current market conditions. Meanwhile, we had hoped to have results from Indonesia, based on COWs that were not signed. We had hoped to have the results of a JV deal or two which seemed imminent but, with the market, were pushed to the back burner. We had hoped to have results from drilling in PNG but delays in shipping and back-logs at the lab there have cost us a couple of months and I don't expect more results there much before March.
As you are likely aware, the financing was made even more difficult by the timing: gold crashed, Asian markets began to fall, the Indonesian monster reared its ugly head, and just about everything else that could go wrong, went wrong during the period between when we launched the financing in November and now. We received a good verbal response from investors, especially in Europe but noone seems interested in looking seriously at exploration companies right now. There is no way that I can see we'll do US10 to 20 million with this. Having said that, I believe we are now starting to see some thawing around the edges.
We have kept the financing open until approximately the end of this month and I expect to announce the results about that time, one way or another.
As to other forms of financing, we are exploring a number of avenues.
The press release is an update, and shows that we are continuing to get good results (gold and silver) from the Santa Cruz project.
No, the data behind the release doesn't give us enough to announce a "deposit" or to calculate a resource. (Note: Yamana has NEVER said there were "over 4mm ounces of gold and over 1mm ounces of gold" at Santa Cruz. We have never made a resource calculation for the project because we have not proceeded to definition drilling yet (ie. there aren't enough holes drilled). ) It is still just giving us support for this vast area. Some of it needs more deeper, core drilling. That is not currently in our budget... which is why we are looking for partners.
The bottom line is that you would be wrong to draw definitive conclusions from these results beyond the recognition that the area remains prospective and supports further drilling and exploration. There are early indications that there may be at least one mineable, bulk tonnage target. But they are early. There are indications that there may be substantial silver in the western region. But they are early. We are not forecasting anything.
I would only add that we are focusing most of our efforts on this project. The others are getting various levels of attention but for the most part, this is where we are most interested and where we have the most promise in the near term. We're continuing to have good results. There are strong indications of silver, as well as gold. We have our own drill there so we can control costs.
A JV somewhere could alter that picture, but this is the project that the leaner, meaner YRI is focused on.
Putting all of this another way, what we are doing is:
a) conserving cash and making dramatic cuts in our spending, including layoffs, program stand-downs, across-the-board salary cuts etc,;
b) proceeding with our exploration on our leading project, Santa Cruz Vanguardia, Argentina, where we continue to have good gold and silver results (although no calculated resource to date)
c) continuing to look for new JV partners (we're in the midst of a couple of site visits right now but, in this climate, almost noone seems prepared to do a deal... this could change at any time as we are getting good feedback from those visiting our sites);
d) working on the Convertible Debenture financing we announced in November, just before the market turned even more sour -- I expect to make an announcement on this within the next two or three weeks;
e) continuing to adjust from what was an 80% focus on gold last year to about 60% now and heading for an equal balance amongst gold (1/3), silver (1/3) and base metals (1/3) by next year;
f) maintaining our credibility by being as honest and straight-forward as we can be.
I hope this helps.
Greg |
