Lightning --- As part of my continuing effort to provide info to you
and others, here is information from a faxed letter sent to me from
Mr. Allan Bell DKT- President & CEO (303 376-2723) that he provided
upon my request.
As a note, It is my opinion, Mr. Bell is a true mining professional
at the helm of a gold mining company with good production
capabilities and great potential.
They have the gold and the ability to produce 200,000 oz per year with
corporate costs below $240.00 per oz.
Dear Bob,
Thank you for your interest in Dakota Mining and I appreciate the
views on gold you pass on via the internet.
So far as the fortunes of Dakota Mining are concerned, this past few
months have been very difficult with no help from the gold market which
seems frozen in the $200 - $300 range. I hope the following will
provide you and your associates an adequate update on our present status.
Principal Assets
Illinois Creek Mine ( Alaska)
Resreves @ $300 Au price------140,0000z
Cash cost to produce----------+/- $180.00/oz.
Reserves @ $400 au price------+/- 400,000/oz
debt:
N.M. Rothschild-------------- $9.2 million
D.H. Blattner & Sons----------$1.4 million
Trade payables----------------$$0.8 million
Exclusive term for bankruptcy reorganization now passed. N.M.
Rothschild may commence foreclosure action, but have not done so.
Attempting to restructure debt with secured lenders and project
needs about $3 million in working capital to startup.
GILT EDGE MINE (South Dakota)
Reserves currently being updated following fall 1998 drill program
but will approximately 200,000 ounces (recoverable)
Cash cost to produce------+/-$220.00/oz
Debt: Gerald Metals---------$4.0 million
D.H. Blattner & Sons--------$2.0 million
Trade Payables--------------$0.3 million
Owned 100% by Dakota and needs about $6.0million working capital
to re-start.
(MY NOTE: ALL OTHER PROPERTIES NOT MENTIONED----SEE MERGER INFO ON PREVIOUS FORUM POSTS AND FUTURE POSTS)
Dakota Mining Corporation
Debt:
$8.0 million in Convertible Debentures
$0.3 million payables
As can be seen from the above, Dakota's major problem is debt,
which was assumed at gold prices of $360. - $400/oz. Current equity
market for junior gold producers is very poor to none existent.
The convertible debt was assumed to complete the USMX merger in 1997
and to finish construction on the Illinois Creek Minesite.
Solution:
1.--Restructure debt (Difficult but making some progress)
---A YUPPIE OUT THERE WITH A FEW MILLION IN POCKET CHANGE
CAN OWN THE HOLE SHOOTEN MATCH!
2.--Restructure terms of Convertible Debentures (Discussions being
held.
3. Refinance debt with a new lender (Attempts so far unsuccessful)
4. Equity offering to reduce debt (Attempts so far unsuccessful)
5. Sell interests in production (Discussions underway, but junior
---companies with cash cautious about spending in light of uncertain
---gold market.
ULTIMATE SOLUTION
With a credit facility of $10.0 million we could restart both projects
in the spring and produce about 80,000 ounces in 1999 and up to 120,000
in 2000. The facility would not be additional debt, but in the form of
an advance with preferential payback within 15 months.
FINAL ANALYSIS
Public holdings of our stock would follow restructure and management
continues to attempt to establish a successful outcome. However. as
discussed above sourcing new financing is very difficult in this
market.
Regards,
Alan R. Bell
President & Chief Executive Officer
MY NOTE: OTHER MINES/PROPERTIES AND POTENTIAL NOT MENTIONED. IF IN THE FUTURE, GOLD RISES TO 400 PER OZ OR BETTER, THE OTHER DKT MINES WILL KICK IN PRODUCTION. ALSO, I HOPE JOLLY OLD ENGLAND AND THE ROTHSCHILDS DON'T STEAL THAT ALASKA ILLINOIS CREEK MINE FOR
PARTS OF A PENNY ON THE DOLLAR......
ENGLAND OWNING US GOLD MINES????
GOOD LUCK GATA!
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