The Graystone Company, Inc. (GYST)

[SMResources]

Hi Lurch

As per my post 41730

The only picture that tells it all is the one showing their sluice box. Its old school and also very inefficient.

even the best sluice box's today without a concentrator off the end of it loses up to 30% of their fine gold. Check out the efficient wash plants here. http://www.goldlands.com/

GYST assays from the geological report show from (simple even numbers) .5 to 1.5 grams per cubic meter. so for simplicity, lets say 1gram of gold per cubic meter over all in the pay layer. below is the geological report on the Gorilla from their website.

https://docs.google.com/file/d/0B4T1iRDs4VPKODQzNjhlM2YtOWFlMC00MzVkLWEwNDgtNTcyNjIxZGU0OGFm/edit?hl=en_US

Below is a link to a example performa based on 1gram of gold per yard of pay material at 60yrds per hour and based on one shift per 24hrs for a season from the beginning of April to the end of October. From what I understand about Peru, their season of mining can potentially be year round

http://smresources.ca/PerformaApril1toOct31.pdf

By those numbers and their geological report, I can understand their enthusiasm. Its that enthusiasm that has fed into your perpetration of them pulling a scam on investors. The people of GYST underestimated the complexity of their project. I believe that that is more due to inexperience than anything else.

The reference of "coarse gold" in the geo report indicates that the source of the gold is very local and good mineral veins will be in the immediate area (also as described in the geo report). However, they are focusing too much (partially from necessity from inefficient equipment) on the coarse gold and taking losses on the finer gold that is literally running off the end of their sluice box. In their condition as is, the only way (off the top of my head) they could possibly combat that is to build a cement pond catcher (mounted on skids) off the end of the sluice box and have a quarter inch screen set up to capture the fines into the cement pond while discarding the larger material into a tailing pile. The catcher pond can be panned out or assayed/metallurgical report and sent out as concentrate.

Its possible the people at gold lands or another wash plant company may have an interest in supplying equipment for a share of gold and/or some shares in the company.

With your reference to Asher. Asher is a toxic lending company that has buried many a company with what you described as dumping millions of shares onto the investors. This leads me to ask, where are you going to find a bank to lend money for a mining project? Finding a bank to lend money on such a venture is near impossible (I should know). Banks only lend money to those who Don't Need It or mines that have a N43-101.

The other big problem they have is the overburden. In this case clay that has to be stripped away to get into the pay layer (looks like anywhere from 4-6 feet of it). An excavator will solve this, mind you, I would rather a D8 cat for stripping. In their place with limited resources a excavator for now is a good way to go until they get more working capital for good equipment.

Placer is one of the most difficult operations to get off the ground simply because of the start-up capital but moreover because of the N43-101 instrument introduced as a requirement to qualify on the larger and more credible markets than OTC but also as already mentioned on the lending practices.

An N43-101 is more suited to hard rock as it can give definite and consistent numbers of gold per ton in the vein whereas in placer, your reserves can vary widely as you can see in the geological report for the Gorilla project. Thusly, a N43-101 report is near impossible as you have to effectively mine the ground to know exactly what you have. It is a catch 22.

Check out the history of when and why the N43-101 instrument requirement came out. It was the result of a company in the 80's that drilled a bunch of dry holes in a foreign country only to salt the samples from gold filed from the dudes wedding band. It was literally the scam of the century.

In this case based on the inefficiency of GYST equipment, I can safely assume that they are not even skimming from the sluice box let alone perpetuating a market scam...they are just losing a fair bit of gold off the end of their sluice box. I would estimate at least 30% of their assays and up to 70% of the assays

in summary, the DO list priority for these guys

1) either drastically improve the efficiency of their wash plant or replace it with a more efficient model.
2) get their excavator

The DON'T list

1)Never exceed the capacity of your wash plant. Efficient miners get rich. Yardage miners go broke.