RE:RE:RE:RE:The SectorNewswire release
Hi Northern, I've attached portions of correspondence I had back in July 2013 (market hasn't really changed much since then, but this was pre- property sale to AEM), as large portions of it remain relevant To your questions. (July 2013) In terms of your comments re: bringing resources to market vs. growing the resources. We are attempting to do both, although deposit growth will not occur while we are not drilling. We have been occupied with finding partners for our activities on a variety of fronts; these include property asset JV’s for one or more of our properties; potential merger discussions; outsourced production; and strategic equity investments by senior mining companies. I know I don’t need to tell you that it is a buyer’s market right now, and that ALL of these activities, except for production (although even that can be, in a sense, dilutive), result in dilution, whether JV, merger, or equity investment. The question is which is least dilution? Our job is to get the best deal in any of these cases, for we know, given our recent internal activities, that there is a lot of interest in our property assets and company, and how we have developed over the years. We have assembled a property package which is one of the largest in one of the world’s most prolific mining jurisdictions, and have discovered roughly 2.1 million ounces of gold (and gold equivalent of copper) in five years at an all-up cost of discovery of about $12/ounce (compare asset acquisitions which value gold at $100-$250/ounce). In other words, on a relative shoestring. The conundrum is that in these markets we SHOULD be buyers not sellers, because gold will turn around, a matter of when not if. In terms of production, I cannot promise that this will occur any time soon…let it be noted however, that we are conducting studies with another mining company to determine the efficacy of mining and shipping ore to an external processing facility. As you can see we are covering our bases, and who we are talking to determines the kind of deal we are seeking. In terms of equity purchases by management, although I let the others do their thing, in my case, I can tell you my wife is buying whenever she can and with whatever funds are available left after paying university education for 2 kids, athletic activities for two younger ones, and living expenses, etc., for all. We both view this as stated above, a buyer’s market, and we would be foolish not to participate within our abilities. In terms of your final questions JV – ongoing discussions, dealt with above Poison pill – we have a shareholders rights plan, and any company we enter into discussions with signs a CA with a standstill agreement. Other style of management compensation -- we are reviewing and will likely proceed down that sort of path. Other info – I think I have covered the generalities above; however, please rest assured that I, as a founder of this company, have a lot at stake here, both financial and pride; I (and my very supportive wife) have been through thin and thick in bringing the company to where it is today from its pre-IPO days. I believe we have been doing the right thing in a cost-efficient manner, and am pleased with the corporate developments, if not with these miserable markets.