MD&AMD&A is up on Sedar, the company is cash strapped, but are finally moving forward the way I would like them to do.
Selected parts from MD&A:
In September 2010, the Company retained DICOMI (Diseño, Construccion y Mantenimiento
Industrial) of Torreon, Mexico to conduct metallurgical tests on mineralized samples taken from
historic underground workings of the Tres Marias mine. The Company submitted two samples of
20 kilograms each: one of sulphides and the other oxides. The general scope of work was to
establish ore benefication characteristics for the sulphides and oxides with emphasis on
germanium, zinc and lead. DICOMI delivered a technical report to the Company in November
2010 and subsequently delivered a supplemental report addressing the recovery of germanium
from the ore.
Preliminary findings indicate that favourable recoveries of germanium, zinc and lead may be
obtained for both sulphides and oxides. DICOMI undertook analysis of five mesh sizes (-60
+100; 100 + 150; 150 + 200; -200 + 250; and -250) leading to the following conclusions:
Sulphides
Grinding tests show that the mineralization, marmatitic sphalerite, may be easily milled
due to the soft and friable nature of the ore.
Experiments using the flotation method demonstrate that a zinc concentrate may be
obtained with projected recoveries in the order of 80 to 90%.
Micro probe tests show that the germanium, 15 to 30 micrometres, is encapsulated
within the sphalerite. It is expected that the germanium would concentrate in a ratio of
approximately 2.5:1. Further tests are currently in progress to measure the distribution
of germanium values in the different size fractions from the head sample to the
concentrate.
Oxides
Germanium values in the oxides are erratic compared to the sulphides. The principal
zinc mineral is smithsonite, a carbonate of zinc.
Grinding tests indicate 90% liberation of zinc to the size fraction of -200 + 250 mesh.
Proposed options to process this material include acid leaching with electrolysis or
reduction using an oven.
Germanium
A zinc concentrate was produced from the sulphide sample taken from the optimum
grind of -200 to +250 mesh (Tyler) with values:
- 2 ppm Ag, 5.17 % Pb, 18 ppm Cu, 56.70 % Zn, 9.3 % Fe, 720 ppm Ge
The resulting value of 720 ppm Ge associated with 56.70% Zn in the concentrate, which
demonstrates that the germanium will go into the zinc concentrate using the flotation
method. The approximate order of concentration from the head value is expected to be
2.5:1.
Cu6FeGeS8 contained within the concentrate; 45% is free and 55% encapsulated within
the sphalerite. In theory, this may lead to the possibility of producing a partial
germanium concentrate by mechanical means.
In December 2010, three technical representatives from DICOMI visited the Tres Marias Mine.
They will prepare proposals to the Company: (1) addressing cost estimates for mine
rehabilitation and conceptual operating costs; and (2) defining a metallurgical balance with a
view to plant design; one each for sulphides and oxides, realizing the limited mineralization that
has been defined at the Tres Marias property. The Company will need to seek input from
potential customers to complete its feasibility assessment.
not NI 43-101 compliant ?? the Company is progressing to determine the feasibility of conducting a bulk
sampling exercise. In the case of the sulphides, the aim would be to produce a germanium-zinc
concentrate using a ball mill and bank of flotation cells. Options to process the oxides include
experimentation using submerged combustion melter technology
The Company has a history of losses. While the Company had current assets in excess of
current liabilities in the amount of $60,000 at December 31, 2010, its ability to continue as a
going concern is dependent upon the discovery of economically recoverable mineral reserves,
Company to obtain necessary financing to complete their development, and future profitable
production or proceeds from the sale of the property. The significant factors that affect the
liquidity over the next few months are:
The Company began to evaluate the feasibility of limited-scale production at its Tres
Marias property. Such production would require that the Company purchase equipment,
increase its investment in non-cash working capital and expand the scope of its
operations, increasing expenses.
The Company plans to bring certain of its MAC claims to lease, which will require
payment of fees and a survey of the property in the next year at an estimated aggregate
cost of $100,000.
have agreed to forgo payment of fees until the Company is on a more secure financial
footing.
Other factors affecting liquidity include
The Company intends to dispose of its investment in Andromeda. The timing and
quantum of any realization are unknown at this time.
The Company is owed US$100,000 (approximately $104,000) plus accrued interest by
Pacific Copper Corp. which debt is secured by a claim over certain of Pacific Copper
would not fund the full amounts contemplated in the War Eagle Note, funding shortfall of
US$55,000. Pacific Copper has notified War Eagle that it considers this failure to fully
fund the War Eagle Note to be a breach, has denied the security interest, and has
assertion that the Company had an obligation to fund a further US$55,000 is incorrect
and believes that its security interest is still effective. The Company believes that it will
ultimately collect the amount due, but has fully provided for the outstanding balance of
the promissory note and accrued interest. The Company has received an offer of
settlement of this debt.
?? The Company???? Mexican subsidiary, Minera Aguila, held a Mexican property that has
been abandoned. The Company has been advised that Minera Aguila has a potential
liability dating from many years ago for unpaid surface area taxes on various lapsed and
dropped claims. The Company has not received any formal notification of liability and
believes that these taxes will not be paid. No liability has been recorded in its financial
For the Nine Months Ended December 31, 2010
At the date of this MD&A, the Company has cash of $91,000 which at the current rate of
expenditure will last until March 2011.
view to disposing of certain assets that are better held by someone else and joint venturing on other assets