Dear Shareholders, I’d like to begin by thanking each of our shareholders for their patience and understanding over the course of a very difficult year. Metals prices witnessed unprecedented volatility throughout 2013, and the resource industry was plagued by uncertainty as a result. This environment created considerable challenges for new projects, as even the most established metals companies strove to slash their expenses in order to maintain profitability.
For Geologix, the timing could not have been poorer. The completion of the Prefeasibility Study at Tepal gave us great confidence in this project’s potential, and we looked eagerly forward to securing financing and advancing towards production. Unfortunately, capital support proved scarce, particularly given our commitment to finding a source of funding that was both non-dilutive and aligned with our long-term objectives.
Over the course of 2013, Geologix rejected four financing term sheets. While each of these rejections represented a difficult decision, we were resolved to protect the interests of our shareholders. This resolve was strengthened by what we witnessed elsewhere in the market, where companies in similar situations found themselves more than merely trapped by hasty financing arrangements, but also facing the loss of their assets as a result. Rather than suffer this fate, we elected to remain patient, minimizing our overhead costs and continuing to search for a source of funding that properly rewarded Tepal’s potential.
While this source has yet to emerge, market conditions have begun to improve, and we are optimistic that it will not be long before we reach an appropriate agreement. Until that point, we can rely upon a stable financial foundation. We recently sold one of the Company’s non-core assets, the RO property in Nevada, for total proceeds of US $400,000. This asset was held in our long-term inventory, and did not factor into the Company’s greater valuation. As a result of this sale and our continued financial discipline, Geologix can remain patient.
However, as I have written in the past, we have not been idle. At Tepal, we have organized our project work so that we can begin construction within twelve months of receiving financing. We have also submitted our permit application to the Mexican authorities, and received only one minor technical question in response. As a result, we are confident that the permitting process is nearing its conclusion. Finally, we received expressions of interest following our concentrate marketing at the close of 2013, and multiple parties have indicated the receipt of our permits will allow them to advance discussions. Due to both these expressions of interest and our conversations surrounding alternate financing options, I remain confident that the long path towards financing will end in prosperous fashion.