RE: RE: RE: RE: $3.5 Million "The transportation problems still effecting OU sales should have been addressed long before we started digging up coal, it was not good planning and we have gone through all our cash which has lead us to some fairly expensive financing."
In August of 2010, The Mongolian Gov't and Russia both agreed to open the Zheltura Border Post but supplied no time frame. That's the root of the screw up on Ulaan Ovoo imo. Given how long it takes to commission a mine and place it into production, PCY no doubt thought the border post would be opened by the time UO got up and running. Obviously, that proved not to be the case. As for why Mongolia did not take any action on its side, I do not know. What can be fairly ascerted, however, is that PCY most likely opted NOT to ruffle any feathers til such time Chandgana obtained the power plant permit. And although PCY indicated no action on the eastern seaports til the second half of 2012, I'm fairly confident we will see the Zheltura border post open by peak coal sales this comming year. I also anticipate a mine gate sales model will be employed where Russian trucks will be able to cross the border to pick up the coal at UO where PCY will not have to worry all that much about the supply of deisel except for the mine. If I'm correct, we can finally expect revenues but at smaller margins per a mine gate sales model but our costs will be less with little to no transportation and logistic issues (ie: like rail access and wagon availability). The higher margin and more attractive coal sales will be found at the eastern seaports. Will have to wait and see what happens there imo. Nonetheless, I think coal sales will be the story come the second half of 2012 where the PPA and power plant is the story for the first half of 2012.