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Gold/Mining/Energy : Dakota Mining DKT -- Ignore unavailable to you. Want to Upgrade?

To: Lightning who wrote (103)	3/6/1999 10:35:00 AM
From: bob k	Read Replies (2) \| Respond to of 141

Lightning --- As part of my continuing effort to provide info to you and others, here is information from a faxed letter sent to me from Mr. Allan Bell DKT- President & CEO (303 376-2723) that he provided upon my request. As a note, It is my opinion, Mr. Bell is a true mining professional at the helm of a gold mining company with good production capabilities and great potential. They have the gold and the ability to produce 200,000 oz per year with corporate costs below $240.00 per oz. Dear Bob, Thank you for your interest in Dakota Mining and I appreciate the views on gold you pass on via the internet. So far as the fortunes of Dakota Mining are concerned, this past few months have been very difficult with no help from the gold market which seems frozen in the $200 - $300 range. I hope the following will provide you and your associates an adequate update on our present status. Principal Assets Illinois Creek Mine ( Alaska) Resreves @ $300 Au price------140,0000z Cash cost to produce----------+/- $180.00/oz. Reserves @ $400 au price------+/- 400,000/oz debt: N.M. Rothschild-------------- $9.2 million D.H. Blattner & Sons----------$1.4 million Trade payables----------------$$0.8 million Exclusive term for bankruptcy reorganization now passed. N.M. Rothschild may commence foreclosure action, but have not done so. Attempting to restructure debt with secured lenders and project needs about $3 million in working capital to startup. GILT EDGE MINE (South Dakota) Reserves currently being updated following fall 1998 drill program but will approximately 200,000 ounces (recoverable) Cash cost to produce------+/-$220.00/oz Debt: Gerald Metals---------$4.0 million D.H. Blattner & Sons--------$2.0 million Trade Payables--------------$0.3 million Owned 100% by Dakota and needs about $6.0million working capital to re-start. (MY NOTE: ALL OTHER PROPERTIES NOT MENTIONED----SEE MERGER INFO ON PREVIOUS FORUM POSTS AND FUTURE POSTS) Dakota Mining Corporation Debt: $8.0 million in Convertible Debentures $0.3 million payables As can be seen from the above, Dakota's major problem is debt, which was assumed at gold prices of $360. - $400/oz. Current equity market for junior gold producers is very poor to none existent. The convertible debt was assumed to complete the USMX merger in 1997 and to finish construction on the Illinois Creek Minesite. Solution: 1.--Restructure debt (Difficult but making some progress) ---A YUPPIE OUT THERE WITH A FEW MILLION IN POCKET CHANGE CAN OWN THE HOLE SHOOTEN MATCH! 2.--Restructure terms of Convertible Debentures (Discussions being held. 3. Refinance debt with a new lender (Attempts so far unsuccessful) 4. Equity offering to reduce debt (Attempts so far unsuccessful) 5. Sell interests in production (Discussions underway, but junior ---companies with cash cautious about spending in light of uncertain ---gold market. ULTIMATE SOLUTION With a credit facility of $10.0 million we could restart both projects in the spring and produce about 80,000 ounces in 1999 and up to 120,000 in 2000. The facility would not be additional debt, but in the form of an advance with preferential payback within 15 months. FINAL ANALYSIS Public holdings of our stock would follow restructure and management continues to attempt to establish a successful outcome. However. as discussed above sourcing new financing is very difficult in this market. Regards, Alan R. Bell President & Chief Executive Officer MY NOTE: OTHER MINES/PROPERTIES AND POTENTIAL NOT MENTIONED. IF IN THE FUTURE, GOLD RISES TO 400 PER OZ OR BETTER, THE OTHER DKT MINES WILL KICK IN PRODUCTION. ALSO, I HOPE JOLLY OLD ENGLAND AND THE ROTHSCHILDS DON'T STEAL THAT ALASKA ILLINOIS CREEK MINE FOR PARTS OF A PENNY ON THE DOLLAR...... ENGLAND OWNING US GOLD MINES???? GOOD LUCK GATA!