MDA for 2012 Q2 I've attached below some excerpts from the recently published Q2 Management Discussion & Analysis:
OVERALL PERFORMANCE
During the first half, 2012, Corporate and General costs were kept to a minimum. Higher costs in the first half, 2011, were related to professional fees and promotion related to a proposed Rights Offering financing. The costs and time involved in obtaining regulatory approvals for a proposed financing deemed fair to all shareholders unfortunately proved prohibitive.
Kept to a minimum, indeed. In fact the entire expenses for the first 6 months of 2012 added up to only $28,413. The company pays no salaries to its officers or directors -- only stock options.
In 2012, we concentrated our efforts on ongoing metallurgical and grinding studies. Early results are encouraging, suggesting potential for better metallurgical recovery rates than previous historic studies had indicated. The grinding work provides key information for determining electrical consumption and, therefore, operating costs. Metallurgical tests help predict revenue per tonne, grinding tests help predict operating costs per tonne. Of further significance, acid base accounting analysis indicates the mineralization is not acid generating.
Tender documents from engineering firms for these specified studies were received. One study will involve the conceptual site plan, hydrological work and environment plan. The other will involve pit optimization, mine planning and general arrangement for a milling/metallurgical complex. The quotes for this work were much higher than management’s, directors’ and the Company’s consultants’ expectations for scoping study level work and, therefore, alternatives are being addressed. Currently the Preliminary Economic Assessment work is out for tender to consulting companies. The goal is to produce a 43-101 compliant Preliminary Economic Assessment (PEA) which provides technical disclosure and economic assessments sufficient to enable reasonably informed investors, the stock market and directors of Moss Lake Gold Mines Ltd. and Wesdome Gold Mines Ltd. to fairly value the Company’s assets.
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The Company has sufficient cash to fund ongoing studies that would lead to the preparation of the Preliminary Economic Assessment or scoping study. The resulting report will provide the basis of a decision to advance development, finance further exploration or consider other options.
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RISKS AND UNCERTAINTIES
The inherent risks which most profoundly affect the Company’s activities are the price of gold and the ability of the Company to obtain financing necessary to establish economic ore reserves. The Company has continued to rely on the financial support of parent company, Wesdome Gold Mines Ltd. Although this cannot be counted upon in the future, Wesdome has been supportive of Moss Lake’s efforts and has provided a backup source of capital.
Yes, in these troubled times when financing is hard to obtain, it's great to be reminded that Wesdome is continuing to support Moss Lake.
OUTLOOK
The Company expects its final metallurgical studies report shortly. Bids for the independent 43-101 compliant PEA are also expected shortly. We want to share and define the economic conditions necessary to support a hypothetical mining operation at Moss Lake with our shareholders, the market and our directors. We aim to get this done before spring, 2013, when our loan with Wesdome Gold Mines is due. We must have information to establish strategic direction.
Conditions have cooled dramatically in the business as the risk capital and credit markets have dried-up. We are hopeful such conditions will free up in time for experienced and competent external consultants to consider undertaking this scope of work in a reasonable timeframe.
So, they hope to have the PEA finished in about 6 months -- just in time for PDAC, I suppose. That's great news. We'll look forward to it!