Might as well look again at the rest of the Chairman's message:
<<We are informed that there are foreign financial resources available for good mining projects. A financial consultant with whom we have spoken has provided three references where financial funding has been achieved within the past eighteen months for mining projects.>>
Wow, it must be an incredibly hot lead to find three references for financial funding.
<<Banking companies and other financial sources require a "Mine Reserve Audit" and a "Bankable Feasibility Study". These documents will require a commitment of approximately $ 500,000 and nine months to complete. The total funding request will be in the range of $ 20 million to $ 30 million, as determined by the ore body audit and the feasibility study.>>
No one will entrust a OTC-BB upstart mining company with $20 to $30 million, unless it's given to a mine engineering firm (Kilborn?) to both build and operate the plant. How will the company get the $500,000 without demonstrating recovery? A few successful leach tests will not be enough. Only a successful pilot plant domonstration may raise some interest, and such demo must be COC with COC ore.
<<Maxam management, after months of analyzing positive and negative effects to the company, has made the decision to consider opportunities of entering into discussions with financially viable companies who may have interest and expertise in areas of mining and milling that would benefit Maxam and its quest for full and profitable production. Maxam would retain rights to manage and control the leaching phase of operations. Although too early to determine levels of interest any company(s) may have, this decision provides Maxam management the ability to negotiate with interested companies. >>
It tooks months to decide whether to consider going the JV route? Must have been an agonishing decision. I guess it took that long to figure out the company is floundering on its own and needs outside help. And no JV partner is going to put up with Maxam managing the leaching phase or any other phase of the operation. The only way a JV partner will go for the deal is if the JV partner runs the show. I can't believe that after all the errors that have been committed and with the dire financial position the company faces, it stills whines on and on about maintaining control. Manage this, control that, all this emphasis on power and control when the company is facing The End if it doesn't get its act together. Maintaining voting control is one of the reasons why the company is in trouble, for if you're unwilling to raise funds for proper R & D because you're afraid of losing voting control, how can you progress forward?
<< These processes have been expensive and as mentioned earlier additional financing is required to accomplish required steps to achieve production on the schedule we had previously announced. Financing and funding opportunities are available, but require ore reserve verification and feasibility study validation. Once financing for accomplishment of these requirements is committed, Maxam will again post a schedule for completion of all processes leading to production.>>
Yes, the company has posted a schedule again and again.
All in all, I'm distressed that the company is on the ropes. We have so much potential here but committing the biggest error of all - failing to manage cash flow - means the company hasn't the funds to proceed forward. $500K is a lot to raise when you've little to show for it. I cannot think of a reason why someone should buy $500K worth of stock right now. 20 lb leach tests won't do it, only COC pilot plant results with COC ore may help.
Rand |
