RE: RE: RE: A little more DD...LW,
1) Call it semantics, but it is more like Majestic does not have to pay anything "out of pocket" - from proceeds of the sale of gold and other materials. From the News Release and Q1 filing:
"Dahedong’s share of Net Profits and the Mining Fee will be payable solely from proceeds from the sale and production of gold and other metals from the Muping Property. No cost, expense or other liability will accrue to or be payable by JVCo, Majestic Yantai or Majestic with respect to Mining Operations"
2) Smelting fees - check the 2010 43-101, section 18.4:
There are two significant contracts that relate directly to mine production and revenues:
1. Mining and milling are carried out under contract at a cost of ¥75 (about $11 US or Canadian) / tonne processed as well as 25% of net profits.
2. The cost of smelting gold bullion is calculated on the basis of a fee of ¥100 (US or CAD$14.67) / tonne of concentrate plus a deduction of 6% of the contained gold, calculated on the basis of concentrate grade.
3) The 1.5M. (and to insinuate that it was a "payoff" or "payola" is irresponsible at best).
From the Q1 Report:
"In November 2009, the Company advanced $1,532,990 to a corporate member of the Muping Group to facilitate the Acquisition Agreement (Note 11). This advance is repayable on demand, is unsecured and bears no interest."
Note 11, last line: "One member of the Muping Group, who is also the principal of Dahedong, will become an insider of Majestic on closing."
Considering one member of the Muping group:
-Will become an Insider of Majestic
-Is the principle of Dahedong (who is the Mill owner/Operator)
-and finally, is a big part of the agreement, going forward, one could (and imo should) deduce:
...That as a principle of Dahedong, the person is the owner of the Mill, and the advance was made to get the mill running to capacity and take care of expenses in the short term. It makes sense to me from the language, from the timing and based on the fact we are talking about Majestic Gold, the Muping group that includes this "soon to be insider" as all working on the same thing - get the mine going and ramped up asap.
To me it is just logic... but, logic has failed me before. Enough of this insinuation of unethical behavior and hand-greasing though - that is simply uncalled for.
B