Some have enquired as to how much was received in settlement from AIG. It was $5million, per below. The MD&A says $4.9 million was received, but $3.2 contributed:
(a) On June 30, 2003, Queenstake purchased from American Insurance Group (AIG) an environmental risk
transfer program (the “ERTP”) (note 11). As part of the ERTP, $25.8 million was deposited in an interestbearing
account with AIG (the Commutation Account). The Commutation Account principal plus interest
earned on the principal is used to fund Jerritt Canyon mine’s ongoing reclamation and mine closure
obligations. During 2008 the company received $5.0 million from the account related primarily to a payment
settlement for the construction of the evaporation pond at Jerritt Canyon, earned $1.0 million in interest
revenue and contributed an additional $2.2 million to the bonding.
In 2008 they spent $55 million on mineral properties and plant and equipment. That is on top of the $32 million they spent in 2007.
In reviewing the financial statements, keep in mind that inventory is shown at $24 million, of which $20 is the stockpiled ore. That reflects the historical cost of the stockpiles, which we suspect the gold in it is worth much more in the current gold environment.
From MD&A:
"At March 30, 2009, the Company had $0.8 million of cash and cash equivalents. "
"CAPITAL RESOURCES
The Company had a cash balance of $1.1 million as of December 31, 2008 and a negative working capital balance of $7.8 million. The Company had a nominal cash balance in "cash restricted for future exploration" (part of "Restricted funds" on the balance sheet) as of December 31, 2008. This represents a portion of the remaining C$12.6 million of the required future exploration expenditures to be spent from the flow-through financing in May 2008 that provided C$20.1 million for exploration on the Ketza River project and other exploration activity in Canada. These restricted funds were applied to non-flow-through expenditures during the last six months of 2008, reducing the amount available to fund this requirement. These restricted funds must be spent by the Company, in accordance with the flow-through share agreement, by the end of 2009. Management intends to take steps necessary to bring the Company back into compliance with the flow-through agreements. If it fails to do so, it will be liable to the investors for their additional taxes payable.
The cash on hand at March 31, 2009 is not sufficient to maintain the ongoing operations of the Company for more than six weeks. Management believes that further financing can be obtained in order to ensure the company will continue as a going concern and return to operations. Should a return to operations be determined to be unprofitable, further curtailment of operations would be undertaken to reduce costs. "