Pete is right.
The mill operated for the last quarter of 1997, and for an additional 2 week into 1998. Mill liners wear, and regularly must be replaced. It is analogous to a car and its tires. A used car will wear tires, as will a new car. The age of the car has little bearing on the tires. The age of the mill has little bearing on the liners.
At the time of shutdown, MGR had contributed in excess of its partner over US$900,000. Our partner had agreed to make all contributions until it had caught up, and had agreed to pay a penalty on all under-contributed amounts according to our JV agreement. The routine shutdown required new liners to be purchased and installed. Our partner notified us, after these had been ordered and were set for delivery, that they did not have the funds, and could we advance further funds. MGR refused.
The production at Bumbat during this commissioning stage yielded approximately 1,500 troy ounces of gold. The cost to run Bumbat during this period, including office and support totaled approximately US$360,000. This yielded an operating profit before interest, taxes and royalties, and depreciation and depletion allowances of about US$100,000.
Once it became apparent that MAC wished to sell, and that they rejected three offers that I am aware of, the plant was prepared for an extended shutdown. This included cleaning, and draining of the circuits, and the hiring of contract security. This is the current status as previously reported.
Dave |
