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Gold/Mining/Energy : Naxos Resources (NAXOF) -- Ignore unavailable to you. Want to Upgrade?

To: Jerry in Omaha who wrote (14257)	7/14/1998 9:12:00 PM
From: ShoppinTheNet	Read Replies (2) \| Respond to of 20681

Excuse me if this SFA and the J&L debate has me confused. I do feel the need for clarification on this issue. (Henry you can be excused from replying and reading this post) Larry states the following: "The only way that j/l can materially benefit naxos actually is to is at the production stage. It CAN NOT help us define a resource. It CAN NOT attract institutional investors. If we could prove up a resource using conventional methods there is a POSSIBILITY that something in the j/l process MIGHT help naxos increase recovery yields." Larry Macklin I believe that Larry's thoughts clearly state the SFA prove up the reserves camp. Let's call them Camp 1 The J&L camp seems to feel that Naxos should prove the recovery process first and then the reserves based on the J&L process. Their fear is that they are wasting valuable time and assets drilling and assaying holes using the wrong SFA process. Let's call this group Camp 2. Now my question for camp 1 is this: We drill 99 holes while working on the J&L process and define the amount of reserves with the Norton/ Ledoux SFA method. Lets for argument sake say we come up with an average value .09 opt. Then, just when we complete this, we prove to the entire world that the J&L black box is as good as gold for both recovery and for proving up reserves. We find the results are far greater using this method. Let's say for argument sake it comes in at .89 oz per ton. Would we then have to go back to hole one to assay all 99 holes to prove the maximum amount of reserves present at FL? Or would the all-important institutional investors accept a conversion factor based a statically correct sample size comparing the test results of both methods on split samples? Consider the above is a possible scenario. Now Larry states; "The only way to fund production would be to raise money based on that resource. IN fact if we could prove a large enough resource using conventional Methods we wouldn't have to worry about production costs because we Would be bought out---plain and simple." Larry Macklin This happens and we sell out based on the camp 1's plan to prove reserves with SFA. Now the buyer is aware and able to prove and use the J&L method. Will we have sold too cheap? Henry would be happy as he states the following. Dozens of junior mines have been successfully developed using conventional processes. Research is best handled by production companies that can better handle the expense. By having a development mine also engage in research you risk severely taxing both financial and management resources. Now given the potentially unique nature of Franklin Lake we have seem fit to involve ourselves in the research business. So be it. But if we can prove an economically viable conventional deposit I would be very happy with just that." The Henry I have a problem with this statement. First I don't feel that just because dozens of junior mines have been successfully developed using conventional processes proves Naxos could do the same. Also if we believe that research is best done by production companies then we ought to put up the for sale sign right now. This same poster also states; "You also state Look at it this way- - - - if the Johnson/Lett method can Increase the conventional method by only .03 to .05 oz/ton that's HUGE. Really huge. That would be anything but huge. Everything we have been led to believe about J/L is that it is a higher cost extraction method. If all it is able to generate is a mere .03 to .05 opt then it is highly unlikely that it will be economically viable and it would most likely be a bust. Let the research continue, but in the background and only if it appears possible that it will be economically viable. I am eager to see what Brian Russell has to say." Why is this poster so willing to spend Naxos money on the SFA process when its economic viability is not yet proven? He is willing to accept hearing it is possibly viable for one process but not the other. I find that quirky myself. Show me solid proof that any or both processes are recoverable economically. To date no one of authority has categorically stated that the first five holes would be recovered economically. So why is one worth funding and the other not? "First, the russell report from all the 4 labs he is using shows good results. This will hype the stock back up and we can sell at a profit. That is the first possible value of j/l. Is that what we want? You all have to decide that for yourselves." Larry Macklin I do not believe this will happen any more then the next hole showing good SFA, results unless someone takes it apron themselves to hype the stock beyond what is it's proven value. "I have no problem with technology. I have o problem with J/L technology. I just think it should be proven before paid for. It should be verified Before being counted on as a legitimate process, let alone as a savior. Especially given the apparently limited market for the technology (other DD's), I see no need to rush into a big deal." Richard M I agree with this as well as for the SFA process.