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Gold/Mining/Energy : Mongolia Gold Resources -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (1933)	3/28/1998 11:19:00 PM
From: Dave R. Webb	Read Replies (2) \| Respond to of 4066

Before we lynch the country's legal system, perhaps we should give it a try? To Phil, yes things were going along well with the repairs up until it came time to pay for the instalation, fuel, explosives...basically the working capital to get things going. MGR had negotiated an agreement that had a number of criteria to be met, which included meeting of financial requirements by our partners. They assured us this would be done. We find out through other channels it has not been done. We have several options at this point. We could step in and finance, as we had in the past. It didn't help resolve issues then, although it did get things to the point where the mill could be started....barely. We do not see the point in continuing in this light, and it is clearly not helping to solve the underlying problem... that of our operating agreement/partnership. It is better for all involved to solve the underlying problem rather than adding another bandaid. The timing for resolving the issues could be immediately, or longer. I can be certain that if we stepped in and financed it would be longer. That's experience. We had been placed in a no loose situation where the down side was where we were starting out at. I am confident that both partners wish to resolve this quickly, and we'll work hard to find the solution. The price of gold that Bearcat is referenceing as the cause of all problems has little to do with this, other than perhaps either partners ability to finance. Our start-up cash costs of production during the commissioning phase, allocating all labour costs to operations was US$205 per ounce....OUTSTANDING! This clearly can be a very profitable operation, but it is impossible for one group to pay 100% of the ongoing costs for 49% of the equity. We won't do it, and our shareholders would not want to see us do it. Dave