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Gold/Mining/Energy : Mongolia Gold Resources

MGR 21.44

-0.2%

Dec 19 3:47 PM EST

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To: Bearcatbob who wrote (2366)	7/3/1998 8:26:00 AM
From: Pete Schueler	Read Replies (1) of 4066

Bob, The mill was shut down for maintenance. It was not broken. MGR decided to use the opportunity for leverage to force MAC to do something. This may or may not have been a good tactic but something like this was needed. The mill has now been operated enough so that the performance, costs, reliability etc. are pretty well established. It is not a risky operation from the cost side. If today's POG will produce a net positive cash flow, Dave should use available cash to restart it. This was MGR's strategy from the beginning albeit assuming a higher price of gold. I agreed with this strategy and still do. If funds are spent on exploration it is like buying lottery tickets. You may make a hit but the game is over if you don't. The mill is the major asset of MGR. This asset needs to be protected from becoming worthless which will happen if it stands idle too long. MGR is in the survival mode. It cannot afford risky expenditures. The mill is the least risky means to survive. BTW, I watched Bart leave a ton of Brewers on base last night. Even when he's giving up hits he's focused and confident. Regards, Pete

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