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Gold/Mining/Energy : Maxam Gold Corp. OBB:MXAM

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To: Jon Matz who wrote (6761)	12/3/1998 8:53:00 AM
From: Richard Mazzarella	Read Replies (3) of 11603

Jon, <<don't respond in plain English>> That's not fair, there could be peace on earth first. <VBG> If I could expand on Chuca's post? Maxam hired a consultant to do the COC bulk testing. The first problem was that the consultant learned that they would be required to have an air quality permit to conduct recovery testing. However, the government allowed the consultant to do some recovery testing in experimental batch mode. The form of the test was modified to satisfy the government. The first test failed to show recoverable metals. How could that be when the company itself measured good assays within yards of the location where the failed COC ore sample was taken? That was the second problem. Was it the change in the test, or was it the ore? Maxam subsequently learned that the COC ore couldn't have come from a worst spot, the ore devoid of metals. That was a big surprise since the company measured good values nearby. About this time Maxam was receiving new metals mapping information from their paleo-channel mapping technology. This mapping technology confirmed that the COC was taken in an area where the ore showed the least metals. As Mr. Runyon told me “we couldn't have picked a worst spot”. Seems that these paleo-channels can go from high metals concentration to none in just a few feet, the analogy being veins in hard rock mining. The next problem for Maxam was that their consultant would have to air quality qualify all their operations to do the Maxam testing. Maxam's activity was only a small part of their work. The third problem was that Maxam was running out of money and it was clear that they couldn't continue with their current consultant as testing cost would significantly increase. Mr. Murphy at his worst. Maxam then decided to do what they knew they could afford to do to increased shareholder value, enhance the paleo-channel mapping and conduct internal small bulk recovery testing. You can see from the press releases that Maxam reports excellent results from that recovery testing. In fact, an argument can be made that the small tests are more indicative for actually mine recovery process than large bulk testing. The 10 hole COC current being conducted should go a long way to prove paleo-channel mapping and restore confidence for success IMO. The issues and explanation of the mapping technology is another subject for another time. Reasonable people could argue that the COC failed and therefore there are no metals. However, one would also have to totally discount all the good assays and excellent recovery testing results that have been reported to date. One could also argue that the company lies, but then why would the company put itself into a testing mode where lying will be easily proved? What we have here is conflicting contradictory information where totality in judgement is required. My judgement is that Maxam is sitting on possibility more 100MM oz of precious metals that can be economically mined. More than just my judgement, but my investment rides that conjecture. A little disclaimer: My post is conjecture based on my best understanding of events.

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