Latest MD&A - Nov 10, 2009The latest MD&A is now on SEDAR.
Here is part of it... Richard
OUTLOOK
In October 2009 the Company came to an agreement with the Attorney General representing the NDEP and signed the Consent Decree, which, once it was signed by the state courts on October 15, provided the Company permission to resume production at the Jerritt Canyon milling facility. The milling operations ultimately resumed on October 20, 2009, subsequent to completing the pre-heating phase and it is intended to recommence mining in the near future.
By milling a combination of available stock piles and recommencing mining activity, the Company is targeting a total production of 150,000 ounces of gold in the first full year of production at a cash cost of $465 per ounce after re-start of operations and after the mill establishes steady state operation. The Company is also planning to secure additional feed for the mill through the procurement of other available stockpiles and is entering into contracts for the supply of consumables at lower than commercially available costs in order to decrease the projected cash cost per ounce.
It is estimated that the commencement of operations and generation of positive cash flow will allow the company to commence repayment of all creditors and former employees which is expected to be completed by mid 2010. The Company has proven and probable reserves at Jerritt Canyon, not accounting for 2008 mining and depletion, of 717,300 ounces of gold. In addition, there are ounces already mined and stockpiled on the run-of-mine ("ROM") pad. These ROM pad resources, along with ore purchased from third parties, will allow the Company to achieve the presently budgeted throughput of 3,300 tons per day. The Company is also focusing on the
completion of a long term mine plan and obtaining financing to fund the required development and backfill work to support future mining activities. The mill facility is currently licensed to treat 4,320 tons per day with an overall potential capacity of 6,000 tons per day with the appropriate permitting.
In the Yukon, the Company will be completing the YESSA application using existing drill results and will continue exploration activity at the Ketza River and Silver Valley properties with a plan to commence development toward the end of 2009. These expenditures will be funded through cash flows from Jerritt Canyon as well as external sources of financing. Sources of external financing may include bank borrowings and future equity offerings. There can be no assurance that financing will be available on acceptable terms, or at all. The failure to obtain financing could have a material adverse effect on the Company’s growth strategy and or results of operations and financial condition should cash flows be insufficient to support the operations. There can be no assurance that the Company will be able to secure the financing necessary to retain its rights to, or to begin or sustain production at any of its mineral properties.
The consolidated financial statements are prepared on the basis that the Company will continue as a going concern. The conditions described in the preceding paragraphs raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern and recover the investment in property, plant, and equipment and mineral properties is dependent on the Company’s ability to obtain additional financing in order to meet planned business objectives and generate positive cash flows. However, there can be no assurance that the Company will be able to obtain additional financial resources or achieve profitability or positive cash flows. Failure to continue as a going concern would require that the Company's assets and liabilities be restated on a liquidation basis, which values could differ significantly from the going concern basis.
On November 10, 2009, the Company had $2.1 million of cash and cash equivalents.