Royal Nickel Corp. RNKLF

Managements Not Interested In Shareholder Value Or...

[Highwired7]

just maybe they could be executing a long term plan that does in fact increase shareholder value.

Our current toll milling agreement for processing of gold mineralization (not nickel, because that uses a totally different mill)...our current gold mill contract was negotiated when B-H was producing minimal amounts of gold.

The contract was a time shared usage of the gold processing mill. B-H ore was processed for about a 3 wk run, once every two months.

So, now consider you are the director of a company that has suddenly proven their theory of gold deposits, and is in the process of a drill program to verify the amount of mine production you will be able to process with the new understanding of the gold deposit.

The drill program is going along well, and you are being informed (as management of a company you do have access to the data first) that there is a significant amount of gold mineralization, and your mine superintendent is telling you how many tons he feels the crew is capable of extracting on a daily/monthly/annual basis.

then you do the math...hmm, I want to increase the total ounces of gold we produce, since that is how I will add value for the shareholders. SO I want to pull as much ore out of the ground as possible.
Extracting the ore doesn't look like it poses a problem, the capacity is fully capable of increasing total thoughput. I can easily add 50% to my mined ore tonnage....but wait, uh oh.

I only was able to produce a certain amount of processed gold due to limitations on the mill operational time available to me. How can I add value to my shareholders by increasing the product I produce and sell (gold in this case) if I can only mill the ore 3 weeks every two months.

Lucky for us, there is a mill, with plenty of capacity, a little over 10 years old, located 20 km from my mine, even closer than the mill I currently use. Maybe I can purchase this mill and increase production, lower the cost of processing, improve profitability and thus create value for shareholders?

Nah, I better not, those people on CEO.CA may think I am simply building a larger company without increasing shareholder value.

Posted by @lexcon @CEO.CA