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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elizabeth Andrews who wrote (2701)	3/25/2002 4:37:55 PM
From: TrueScouse	Read Replies (1) \| Respond to of 39344

Liz: I agree that GAM's PR could be a lot clearer. I just called the company and was assured that the agreement between Bolnisi and Gammon Lake "includes everything stated in our January 29th press release, plus access for GAM to a line of credit as stated in today's PR". So, going back to the previous announcement, this is the agreement that was described then: ====================== January 29, 2002 THE AGREEMENT Bolnisi and Gammon Lake have entered into a letter of intent with the following principal terms: - Both parties have a 60 day period to carry out due diligence. - Bolnisi will pay Gammon Lake CDN$30,000 per month commencing the month following the completion by Bolnisi of its due diligence and the decision to proceed with the joint venture until Bolnisi has earned its interest or withdrawn from the venture. - Bolnisi will manage the Ocampo Project feasibility and development and subsequent operation and will earn a 60% interest by putting the project into production at a rate of not less than 1.25 million tonnes per annum at Bolnisi's expense. - If the project is not in production within 18 months following completion of due diligence, and the decision by Bolnisi to proceed with the joint venture, Bolnisi will pay Gammon Lake CDN$100,000 per month until Bolnisi has earned its interest or withdrawn from the venture. - If the project is not in production within 24 months following completion of due diligence Gammon Lake will retain 100% of the Ocampo Project. - Bolnisi will pay US$60,000 to the underlying land owners at the Ocampo Project not later than 23 May 2002 provided that Bolnisi has not withdrawn from the venture. - Bolnisi and Gammon Lake will be responsible for their respective shares of seven annual payments of US$1,000,000 to the underlying land owners at the Ocampo Project beginning on the first anniversary of the commencement of production at the Ocampo Project. - Bolnisi will be granted a first right of refusal to match any third party offer to Gammon Lake to develop any of the Ocampo Project area resources outside the area of interest covered by Bolnisi's agreement. ============================ Does this clarify things? It seems to me that Bolnisi could still withdraw from the project and GAM would be not be left with more than they've got now. But as long as Bolnisi stays involved, GAM's going to get $30,000 a month cash while Bolnisi pays for all further feasibility and development costs on its pieces of the Ocampo project. Meanwhile, GAM can continue exploration on the pieces it still owns 100%. How do you read it? GAM doesn't have a great reputation, so I'm quite prepared to be proven wrong -- although it would be nice if this was for real! Regards, Howy