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

To: Bearcatbob who wrote (2366)	7/3/1998 3:35:00 AM
From: marcos	Read Replies (1) \| Respond to of 4066

Bob, the major cost of the mill has been spent, so from here on in it's operating costs/benefits only in the equation used to determine whether or not to run it. The debt must be serviced in any case. The mill was used, and had liner left. It was run until liner change was due, and shut down to change them, and to tweak the systems in general, which is not entirely novel or beyond comprehension, imho. At the same time, a decision was made to deal with the MAC under-contribution, and hence the extended shut-down. Up until shut-down, there was a positive operating cashflow from the mill. Assuming a resolution to the MAC thing and improvements to the mine/mill, the cashflow should be even more positive on startup. So I say run the mill, if it makes money. It's there, the ore is there, it runs at a profit, so why not? Even better - flog it to somebody else and use the money for exploration ... but this is not the kind of market where you have that choice. So, run the mill.

To: Bearcatbob who wrote (2366)	7/3/1998 8:26:00 AM
From: Pete Schueler	Read Replies (1) \| Respond to of 4066

Bob, The mill was shut down for maintenance. It was not broken. MGR decided to use the opportunity for leverage to force MAC to do something. This may or may not have been a good tactic but something like this was needed. The mill has now been operated enough so that the performance, costs, reliability etc. are pretty well established. It is not a risky operation from the cost side. If today's POG will produce a net positive cash flow, Dave should use available cash to restart it. This was MGR's strategy from the beginning albeit assuming a higher price of gold. I agreed with this strategy and still do. If funds are spent on exploration it is like buying lottery tickets. You may make a hit but the game is over if you don't. The mill is the major asset of MGR. This asset needs to be protected from becoming worthless which will happen if it stands idle too long. MGR is in the survival mode. It cannot afford risky expenditures. The mill is the least risky means to survive. BTW, I watched Bart leave a ton of Brewers on base last night. Even when he's giving up hits he's focused and confident. Regards, Pete