I talked to RM for about a half an hour, Sunday morning. By and large, there isn't anything new to report, but there are a few details to flesh out the situation a little better.
The projections by some people that the company will be out of cash by the end of the first quarter are based on the MD&A issued last fall. The cash value of the mine equipment sold came in at better than the estimated amount. They also have had costs awarded from the bondholder suit (receivables, not yet on the books). Canadian and U.S. operations are pared down to the bone (running on fumes, is how he put it). Staffing in Venezuela varies between 100 to 150 people, and is part of their strategy of strictly adhering to every aspect of the agreement with the government, in order to remain in full compliance should they move to arbitration. They should have enough cash to get through Q2.
The recent Venezuelan approvals of foreign investment in the oil fields has KRY feeling more optimistic that there will be some sort of a deal worked out for the mine. The company is exploring a variety of options, but there is no one angle that seems to be their focus.
The existing resource base was calculated using $550/oz gold, with a throughput tonnage rate that would provide a mine life of about 65 years. With current gold prices, and a scaled up plant to give a 15-20 year mine life, they'd likely partner up with a major.
I also enquired about the extent to which artisanal miners are having access to the area, as news reports had indicated that incursions were very commonplace. Richard told me that the areas in and around the main pit are well guarded. The locals are finding access to some of the peripheral areas of the property, though. I also asked about the impact of the mercury used by those miners on the processing contemplated by KRY, as mercury poisons the cyanide leach process. Apparently, they have engineered a mercury extraction circuit into the process, so that they can simultaneously recover the gold and restore the environment.
I'm going to be at the show until Wednesday, so if anybody has any questions, post them here or by PM.
Lar
