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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Metacomet who wrote (126686)	8/2/2008 2:43:31 PM
From: E. Charters	Respond to of 313059

I guess you could say that for a lot of explo companies since the market implosion worldwide. Excess capital being driven into notoriously unproductive sectors is always a dutch tulip economy.The only thing Rox had which had any promise of return was the moly thing. I mean in that they had a program that might make it return and the cash for it. It was failed by lack of serious application to the vein system as a potential producer. Whilst they did take a stab at it, they did not get into a serious "let's mine this" mode. The subsequent failure to produce an economic picture was hurriedly swept under the rug with little examination of where the shortfalls were. I don't think they ever established whether it was a mining or milling eff up or just failure of mother nature to have the goods. I believe because they pushed the vein overly in length, (it only had 40% visible moly in its lateral extents), and they too hurriedly mined it and went into a tailspin on the milling with all kinds of break downs, that the vein had no chance. I believe the factor was only 30% that the vein did not have the goods, the rest was operational. Given that the leadership at the time was not convinced of the value of it from the get go, and wanted to put the money into the Northern Empire, wrongly or rightly, the moly did not have a chance. And it was way too expensively approached. The way to do that vein was to mine it forensically and drib and drab it to the mill over a year, getting 10,000 tons of feed ahead and knowing the head grade to the nth degree. Then to feed it to the mill while they took the necessary 2 months to get it into tune. Then re-run the tails if necessary. If the vein was not necessarily going to mine it they should have had parallel programs going on towards getting underground on the Norther Empire by ramp and bulking that. That has been done once before by Jeff Nelson and he made money 28 years aga, I don't see why they couldn't do it again. I thought the moly was a good small 100 tpd vein that could make modest money if they stayed narrow on the prick and kept their grade. up. Some shoots were only 70 feet long. Some were double that. It did not all run. It was also some narrow. I estimate the vein width to be about 3 feet including 8 inches of wallrock on each side of the quartz. The wall rock had as much moly as the quartz but they mined it as quartz only inducing large losses. The moly still could be tackled and the 7 or more gold veins nearby too. But to treat is as anything but a sideshow right now would be a mistake strategically. (Remember Cominco thought it was good enough to put 30 holee into it in the 60's.) They don't have the money for the Empire without a farm in or a JV groups that is dedicated to small mining. I believe the contract miners can be found to ramp into it and they have the mill. It would cost about 7 or 8 million to get it going. I could get a private group to put up half the money but they need 100 holes into mineable widths to start up. I saw some data on it a few years back that indicated there were places to start. Also a vein stripped near the highway that looked continuous and juicy and it was not narrow. You could even strip mine that vein on the surface for about 50 feet deep and 300 feet long. In my opinion the drilling they did east of the mill was a so-so program. It did demonstrate that they had lots of gold veining out there. Again,I cannot attest to the completeness of the program. Their weakness is the diffuseness of their approach at present. Looking at their market and their stock price, it may seem that there is no point in making plans that would entail the issuance of 40 million shares of stock pre feasibility. They need triple the price. The way to get that is to have a team in place with some demonstration of capability and a realistic plan with a price tag on it. Does the market want this at present? Hard to say. Gold price seems to support it but when you talk real mining a lot of doubt is cast as to the ability of CDN jrs to find men and keep real costs below gold returns. I believe it can be done at 0.40 opt grades. No way any underground mining is going to cost anywhere near $350 a ton. I would have trouble spending more than 50 dollars capex and 100 dollars throughput if I fed the miners Champagne and Caviar at lunch. That is presuming they worked at least 7 hours a day.:) EC<:-}