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Gold/Mining/Energy : Maxam Gold Corp. OBB:MXAM -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brubaker who wrote (5448)	8/25/1998 2:53:00 AM
From: GlobalMarine	Read Replies (2) \| Respond to of 11603

Larry: There are three plants, one of which is built and the other two not: 1) The Peoria Seven plant. It hasn't been completed. The front end of the plant is sort of built, consisting of grizzlies, vibramills, filters and other related equipment. The company built the front end without having money IN THE BANK to complete the leach and ion exchange portions. 2) Maxam Custom Milling plant. It hasn't been built and the funds not completely raised. You feed in concentrate, and then it leaches and ion exchanges. The plant exists on paper only at this point. My speculation is that the MCM plant will be THE DE FACTO Peoria Seven plant when it's built, contrary to the stated objective of processing other companies' concentrates (you concentrate the ore using the equipment at Peoria Seven, then process the concentrates through the MCM plant). Since Maxam controls MCM, it is more than likely to simply use MCM to process Peoria Seven ore, IMO. Why go out and find other companies' ore to process when you can use your own? If my speculation is correct, it's a pretty swift move on the part of management though rather misleading to MCM investors who expected other companies' ore to be processed as per representation. But if the MCM plant works, I don't think investors will care if the ore came from Mars. 3) The 10 ton a day "pilot plant" at Cimetta. It is a completed batch plant that can run in continuous mode (simply process one batch after another). The first test failed, as per news release. That the company has put this pilot plant on hold when it is the key to further process makes me speculate and wonder if perhaps it doesn't work. My rule of thumb is that unless recovery is demonstrated, there is no demonstrated recovery. Merchant bankers would undoubtedly agree with me. Progress to me means one thing...demonstrating recovery. The company can drill all it likes and show off nice fire assay results but unless the company demonstrates recovery of precious metals from dirt (something that GPGI appears to be doing now, BTW - I am not a shareholder of GPGI so I'm not hyping), the company may face a grim future. And by recovery, I don't mean mickey mouse lab scale tests. I mean bulk scale tests.