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

To: Bearcatbob who wrote (3210)	2/24/1999 1:25:00 PM
From: Dave R. Webb	Read Replies (1) \| Respond to of 4066

Bearcat, I thought you had experience in startups? You're not trying to say that your experience is that shortages or problems during are start-up are to be expected to continue through the life of an operation are you? The figures that you have reposted seem to show an operating revenue of $490,833 and an operating cost of $356,319. The operating cost includes all of the expenses directly attributed to Bumbat. That includes the cost of their office, consultants, etc. Actual operating cost (dollars required to produce gold) usually exclude these office charges. As someone involved in start-ups, you'd have a hard time convincing me that for the three month period after you threw the switch that cumulatively, all revenue exceeded all costs. Tough to do, but Bumbat did accomplish this. I didn't say this was easy, but that: the costs per tonne are at or slightly below HA Simon's feasibility figures. the grade of the 118 vein is at the reserve grade for the portion that was mined. the mill was operating at 75% throughput capacity and close to 100% rated recovery at shutdown. the most negative finding during the commisioning was that the dilution exceeded estimates. This was identified, and remedial steps had been taken but the effect had not been seen by shutdown. Financing has been difficult, but previously more than two parties had agreed to provide full financing for start-up. As the participating structure of Bumbat is resolved, it would not be unreasonable to expect financing to be arranged. This has already been alluded to in previous news releases. Dave