Auxin DetonatorsIn 2010 the three directors Levesque Bruziewicz and Amin raised money from aquaintances to import detonators from Auxin Tech Ltd. These show up as the loans which paid 10% interest. Apparently when Nordex did not honor its commitment to pay interest in a timely fashion one investor withdrew. The total amount of purchases of these products was several hundred thousand dollars.
This initiative was began, I am told, by John Kozak and the board present at that time. In 2011 the detonators posed a major problem for Nordex because it was said by miners that they produced what is called cut offs. A cut off occurs when the schrapnel produced upon detonation penetrates into another shock tube and stops detonators further down the line from doing what they were designed to do. These cut offs produce several production and safety problems and costs the mining company or its contractor. The most important cost of course is in regards to safety. Let me explain for those that are not familiar. When a cut off occurs live explosives remain within the drill holes. It is supposed to be carefully removed before new blasting commences. There are times when the production forman decides to go ahead and redrill even when there is still live explosive material in the holes. The charges however can be triggered just by the vibration of drilling. The term shock tubes kinda expresses this concept clearly enough, but some people just don't seem to understand. Besides the safety concerns cut offs result in extra costs and lost productivity.
In 2011 it was claimed by local mines that the Nordex Auxin detonator caused caused cut offs. Most every mine then refused to use them. (One of All Group's staff was holding one in a picture taken at the then named Brigus Black Fox mine.) These detonators helped to cause a big problem for Nordex. Mines like to buy all their product from one or two suppliers. Losing detonator sales thus also affect bulk emulsion sales. This was a big part of the reason for the weak sales in 2011.
Nordex was the exclusive distributor of that product line. So my question is: What happened to the unsold inventory? Were the detonators replaced by better quality safer products, were they returned for credit to the supplier or were these items just destroyed? If they were destroyed did Auxin Tech repay Nordex for their entire purcase price, finally if Nordex expensed them there should be a note in the financial statements. I have yet to see any mention of a write off for bad merchandise .
One conclusion as evidenced by the reluctance of local miners to use the detonators is that the detonators were not properly tested before they were put into service. Who was in charge of product testing at Nordex in that time period?
B&D