Rats leaving the ship. Company no longer has a CFO on the payroll except in consulting capacity. Company probably could no longer afford him or pay him. No money raised, no information from investor relations per formal release of information, share price plummeting, delayed 10q and information on website out of date and constitutes false advertising. These are the facts.
Speculation: Some form of bankruptcy imminent
Old Lesson relearned,
There’s Gold in Them Thar Hills, Or Is There? By Douglas B. Silver
Gold Mines: A Hole In The Ground With A Liar Standing Over It The great American philosopher, Mark Twain, described a gold mine as “A hole in the ground with a liar standing over it.” Although his characterization hardly pays tribute to the people who produce the precious metal, his concept does hold a grain of truth. The opportunities to misrepresent what resides down that black hole are infi- nite, as are the attempts to make a fast dollar from the greed of others. During 1996, a small Canadian exploration company, Bre-X Minerals Ltd., lost three billion dollars of shareholder value when it was revealed that its gold project in Indonesia did not contain any economic gold. The fallout of this event did serve, however, as an important wake up call for the mining industry, regulators, and for those who know-
ingly ignore the unethical practices of others in this small industry. The relationship between an appraiser, nature, and the mine’s owner is very interesting because of the interplay of different agendas and profound influences of intangible aspects on the deposit’s value. The appraiser seeks to place a value on the asset. Nature works hard at being complex. The owner has to project values based on a small data sample. The less scrupulous owner uses these intangible aspects as a weapon for manufacturing value. Collectively, these parameters inhib-
it one’s ability to quantify value with any sense of confidence. The appraiser must have the ability to decipher, interpret, and judge these vari-
ous factors when reaching a determinative value. The following list of issues high- lights the challenges encountered when performing a gold deposit appraisal.
Oil and Minerals Do Not Mix In the oil, natural gas, and water resource industries, the targets are fluid. This
mobility allows one to drill a hole, discover the source, cap the hole with a pump and begin extracting the asset. In coal mining, the strata containing the ore is measured in square miles. It is easy to project and creates multi-decade operations. In gold mining, the gold is irregularly distributed in a small volume of rock measured in acres.
The erratic distribution of gold haunts those professionals who calculate reserves. Few employers are willing to wait until the mining has been completed and the ore body is exhausted before they find out if they were correct in their original estimates. As a consequence, one must realize that the best laid plans of miners and men are not always successful. It is important when conducting an appraisal to care- fully scrutinize the reserve calculator’s methods by inspecting the practices used for data collection, maintaining data integrity, and calculating the reserve size.