RE: No Cash = DILUTION BudSpud
1 - The share price slide was a result, not of missed expectations, but of interpretations of resources between drill holes – Distance between drill holes was too great to support numbers presented in former in-house NI 43-101 Reports.
2 - The share price slide was also a result of the exit of investors that failed to see, (or take the time to find out) what they were invested in. This same group, evidently, did not know the value of the actual reported resources and the value per share those resources represented.
Your suggestion that investors, (who are aware of the present resource value) ignore reason, logic and facts and sell is at the very least questionable advice.
At present, $800,000 is needed for Phase I. Phase I will add to resources and identify and/or reveal additional resources – Read the excerpt from Mr. McBride’s Report, (below) and you will see that this true. If not true there would be no justification for $3,000,000 spent on Phase II – In fact, if you read the excerpt below you will see that some ‘known resources’ were not included in said report because further drilling is needed, (and required) for valuation to be expressed. What this means is, Phase I would add to resource quantities.
Recommendations
Previous drilling has been interpreted using considerable faulting and while some are seen in the field, the author suspects that the fault displacements are less important than presented. Possible extensions of zones across fault zones were noted during the resource calculation and these should be tested as they represent the potential to rapidly increase the resources.
A program of diamond drilling is proposed. Targets for this drilling include the Dos Hornos-Veta Tomas trend which may represent two parallel trends. Previous drilling on Dos Hornos 2 has left gaps in the database which have to be filled-in. The deeper holes on Veta Tomas showed weakening mineralization; thus the core should be re-examined to see if a geological control for this change can be identified. Since the original field mapping was completed, many more outcrops have been exposed along roads. These need to be mapped for geological information and mineralization.
Once Bocas North is lacking in drilling between the east and west veins that is needed to test the open pit potential. In addition, the drill core from the 2011 program was only selectively sampled. Remaining sections within the projected pit limit should be sampled and assayed. There is a considerable gap between the Once Bocas North and South drilling which lies in lower ground. This area should be tested. Recent work on Once Bocas South suggests that the vein direction may be more easterly than used to plan the 2011 holes. This possibility should be investigated and tested by drilling.
Chacuaco North is a prominent ridge with west dipping veins. The few holes drilled give values that may be mineable in an open pit. Additional shallow drilling is required. The same can be said of Cafetal.
To provide a preliminary assessment of these targets a drill program of 2500 metres with the testing in between 15 and 20 holes is recommended. Target selection will be based on the updated database. The cost of this Phase 1 of this program is projected at US$800,000