Chuca: Like I said, I hope I'm wrong about things. I rather get the funny feeling now that Naxos may stand a somewhat better chance of succeeding than Maxam. Naxos has almost $2 million in the bank. Maxam has maybe $20K? Naxos has many shareholders, none of which have a controlling interest in the company, and shareholders have had a moderate amount of influence over Sid Kemp, the CEO, and have succeeded in stopping an expensive drill program that would have used up the remaining funds without any enhancement of shareholder value. Maxam is controlled by the Runyon family, and there isn't a damned thing we can do to influence Dale Runyon if we feel he is on the wrong track. Runyon has said that we either trust management or sell our shares, as if we must decide whether to invest in the company based on trust and not fundamentals. I suppose this means that whatever screwups occur, like no production, no money, and no pilot plant results, we should continue to have blind faith in him. Furthermore, IMO one of Runyon's MOs has been that whatever he does, he must maintain voting control over the company. So he has been unwilling to raise the kind of money needed to conduct proper R & D on recovery processes, instead keeping things small and mickey mouse in scale, including leach testing only to 750 grams in size. Runyon says that no scale up testing on Peoria Seven ore has been done because it wasn't necessary for Hewlett has done all sorts of tests over the years ON OTHER ORE so it'll therefore work on Peoria Seven ore. And because the company appears to be on the ropes now on account of all the judgement errors, chief among them spending all its cash on building grizzlies, vibramill setups and so forth without certainty that funds would be available to complete the rest of the mine infrastructure (i.e. leach and ion exchange system) and without certainty that the recovery process works, the company is out of cash and Runyon has no choice now but to issue shares to raise cash and will implement a poison pill plan for protection.
IMO, it boggles my mind to think that no scale-up testing of the recovery process has ever been performed and yet the company barges ahead spending all its existing cash resources building grizzlies, vibramill and filter assemblies then finds out the speculative cash resources due from IPM won't be forthcoming so it cannot complete the rest of the mine construction, and then it builds a mickey-mouse 10 ton a day plant and apparently finds out the recovery process doesn't quite work. Sheesh, what a MESS!
I hope I'm wrong and have to eat my words; this is one time I will be pleased to be wrong.
Rand |
