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Right. But none of that has anything to do with refinery credit.
Where did any mention of refinery credit come from?
Remember those loans that Mexus took out in June & July? You see when a company doesn't pay back the money borrowed the amount of the loan gets "converted" into company shares at a fraction of the market price of shares. These are called convertible notes. The loan company then sells the discounted shares on the open market to recover the money loaned to the borrowing company. But you knew that.
So the mention of a refinery credit seems to be an attempt at a Red Herring or Straw Man argument.
In order to get refinery credit you have to have some mineral of value to sell the refinery for refinement. Mexus frequently seems to get stuck just before that step.
You weren't necessarily incorrect, just never seen any successful miner pump a potential future sale of a small amount of gold in 3 seperate PRs. Usually companies make the sale then report it.
The three PR hype is a huge red flag considering there are loan conversions occurring. Makes it obvious they are pumping the stock to help support price during the conversion.
Speaking of price, I wonder if the painters showed up at closing time.
Less info than PR which says
True, the paint jobs have been noticeable. However, that price has held up enough to be saved by end of day paint jobs is still commendable.
Actually, price is holding up well considering the circumstances.
Where will the 15 million shares that are being dumped come from? Worst case for the most recent loan conversions would only be about 10 million shares.
It's doubtful lenders would dump 7 million shares a day unless share price was maintaining strong support levels.
Is anyone following Level 2 data? Curious if it is someone dumping or if it is shares from the converted loans.
Didn't see your post until I put up my response.
Good to see someone else have the same line of thought.
So are we leaching or using a gravity separator?
The use of the term gold concentrates typically indicates a gravity process is being used to recover the gold and not a leach pad.
Further, if leaching is the process used the result is typically a leach solution called precipitate, not gold concentrate. In the leaching process the gold from the precipitate is then recovered typically by electrowining or merrill crowe not sent to a smelter.
If the leach pad was how this product was recovered then there wouldn't be a need to send the product to a secure site for smelting as Mexus has reported it has it's own carbon filter electrowinng process in place.
More significantly this is the step of the process (going from concentrate and/or precipitate to smelted gold) where Mexus seems to struggle. Remember the tub o zinc, the vats of overcooked ore and salty gold? All those are struggles with going from precipitate/concentrate to sellable gold.
The PR makes it sound like money is on the way, but THIS is the problem Mexus can't seem to solve.
I was not familiwar with the term "Gold Concentrate", so I did what I've been instructed to do on this site multiple times and that is perform my own due dilligence. Here's what I found.
What is Gold Concentrate?
Ask MGS: What are Gold Concentrates?
While “gold concentrates” sounds like one of gold’s chemically modified derivatives, it is in fact, natural. Better known as “pay dirt,” gold concentrates are sourced in two different ways. The first is through gold panning (or other techniques that use gravity separation). When panning for gold, the objective is to separate the particles of dirt from the heavy particles of gold. In most cases however, gold is not the only heavy material in the pan. This end result of the panning process is the gold concentrates – which must be sifted through manually to extract the bits of gold. Gold concentrates tend to be mostly iron, so they are also known as “black sands.”
In a way, gold concentrates are quite similar to the polishing material and filing dust that collects on a jeweler’s workbench. The main difference is that bench sweeps contain a lot more gold – which is why we buy them.Unfortunately, natural gold concentrates don’t contain enough gold for our refinery to work with, so we don’t accept any from customers. However, we do have clients whio do work with gold concentrates, feel free to call and we’ll send you in the right direction.
This ship, the SS Mexus...
I was using the principal amount of the loan + transaction costs + interest to come up with the amounts. Those are also the amounts the company accounted for in it's financials. It is extremely doubtful that the company made an interest payments during the term of the loans. When the loans convert that is dollar amount the company will owe and have to convert into stock for the lenders.
Since the two loans came from different companies (one from Power-Up Lending and one from J&J Investments) it will be interesting to see how patient the lending companies are in converting or if they will try to unload before the other one does.
They can't be too patient because another $47,000 loan becomes eligible for conversion on January 13th (And another $91,000 on February 7th) - The February one has worse conversion terms than the others. Only 60% of lowest closing share price within the last 20 days. The others are a 65/15 term.
I'm sure the lenders holding the toxic notes would love it if you bought right now. That will help bring the price up before they dump a few million shares after the loan converts around December 6th.
According to the 10Q there were 2 notes issued on June 9th, 2020. One for $139,400 and the other $67,285. (These notes can start to convert 180 days after the issue date).
Doing a rough calculation, the lowest recent closing price was .03. At 65% of share price that means the the loan gets converted at $.0195 per share. Divide that by the total loan amounts owed, $206,685 ($139,400 + $67,285), and you get about 10.5 million shares about to hit the market.
That's assuming the lenders are going to play nice during the conversion. The conversion price is variable. Its calculated at 65% of the market price which is defined as the average of the lowest two trading prices during the previous fifteen trading day period.
That means, the lender could convert one of the loans (most likely the smaller amount) first. The dumping of those shares would create a new lower stock price. Then convert the larger note at 65% of the new lower price. If the first loan conversion drops the price to .02 or lower, then the total number of shares to hit the market could be closer to 15 million.
Let's be clear. I am not the one who keeps bringing up the non-established reserves nonsense. I am rebuffing the person(s) who does keep bringing it up. That nonsense story has now been debunked multiple times - including using the document you linked too.
I'll drop the issue as soon as the others on this board finally concede Mexus can show (and could have shown) gold sales as revenue (at least through 2020).
Mexus lied about gold sales throughout 2018 & 2019. Some posters have tried to cover for them with bogus claims about how the company can't claim gold sales due to not having reserves. Those claims have been factually and repeatedly debunked, yet some are still clinging to that claim.
Gold cannot be reported as 8 said.
Sale of product during the development stage
None of the companies reviewed disclosed their accounting treatment of revenues derived from the sale of product during the development stage, probably because such revenues are not material to the financial statements. The alternatives are to record sales as revenue, in which case the cost of sales would presumably need to be computed, or to credit revenues against the cost of the project to which they relate.
No. You said, the SEC does not allow gold sales to be shown as revenue. Period. Not that Mexus was choosing one method over another. You have repeatedly, and falsely, stated that showing gold sales as revenue was forbidden by the SEC.
The whole reason this issue came up was because in 2018 & 2019 Mexus was claiming gold sales, while no sales were being shown in the 10Q or 10K. When it was being pointed out Mexus was making false claims about gold sales, this absurd claim that the SEC doesn't allow gold sales to be shown as revenue was concocted. The defense was the gold sales were being reported in the financials, it was being deducted from exploration costs, because that was the only way a miner with unproven reserves can report sales from gold.
That claim has now been thoroughly proven to be false. Mexus could have demonstrated any of these 2018 -2019 gold sales as revenue or reduction in exploration costs.
None of the 2018 -2019 10Qs or 10Ks reported either revenue or offset exploration costs. Therefore Mexus did not sell any gold in those 2018 -2019 reporting periods despite claims to have done so.
I don't interpret that section the same way you do. It doesn't mention anything about recording the sale of minerals.
However, on page 11, first paragraph on the top right it states;
Sale of product during the development stage
None of the companies reviewed disclosed their accounting treatment of revenues derived from the sale of product during the development stage, probably because such revenues are not material to the financial statements. The alternatives are to record sales as revenue, in which case the cost of sales would presumably need to be computed, or to credit revenues against the cost of the project to which they relate.
On the other hand, under the exposure draft, if the operations are necessary to bring the asset to operating condition, then net sales proceeds received during activities necessary to bring the asset to the location and working condition necessary for it to be capable of operating properly, are deducted from the cost of the asset.
First, you still haven't provided the link to the language in current SEC guidelines forbidding gold sales be claimed under revenue.
Next, what were the obvious reasons the 45% contract with the brothers was rescinded? And how is it that a couple of brothers with a plant washer could produce tha much gold, yet Mexus hasn't prodiced 300 ounces since then?
Now the story is now changing to, if someone else digs up the gold nuggets then a mineral reserve isn't needed to claim revenue from gold, but if Mexus mines it all by itself, then an established mineral reserve is needed to claim revenue?
Also, could you please point out where in the 2012 10k it mentions Mexus was involved in any JV with any of it's properties?
I did find this in the 2012 10K
Revenue Recognition
The Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.
Revenue
For the year ended March 31, 2012, we had revenues of $239,911 compared to $21,000 for the year ended March 31, 2011. We recorded revenues of $260,911 for the cumulative period from September 18, 2009 (Exploration Stage Entry) through March 31, 2012. The revenues of $239,911 for the year ended March 31, 2012, are from our mining and salvage operations.
How did our fixed assets remain the same when we added a new leach pad, ball mill, washer plant, 330 excavator and a 40 ton haul truck to the operations in the last 3 months?
Also, I thought we were previously told the value of the assets was over $10 million. Why is the total asset value on the 10Q only $1.2 million?
Guess what to lookie? Folks for years deny SEC accepted Industry Guide exception test revenue accounting?...show obvious little exploration mining understanding yet continue in advising on line small private investors
while proven frauds by plainly filed SEC documents.
It is becoming more apparent that the reverse split was done to keep up the ability to borrow more toxic notes.
It likely wasn't needed to cover the number of shares needed for loan collateral, but more to keep the price from going no bid. My theory is PT knew production wasn't as immenent as they had been portraying and that more funds were going to be needed to keep things going through at least January 1, 2021 or longer.
At the .002 -.003 range the share price wasn't going to hold very long once the new loans started to convert. Additionally lenders would be reluctant to extend more loans with the increased risk of the stock going no bid.
Agree the PR is unclear. If the salty gold was being run through the ball mill and/or wash plant what was being leached on the small part of the pad (Can we assume it was leached on the original pad and not the one being built)?
Is the processing of the salty gold material through the ball mill/wash plant being stopped? Is the material being discarded as worthless? Is it being set aside with the tub-o-zinc for processing later?
But hey, that's in the past. It doesn't do any good to re-hash that old news. Our focus should now be on the material, averaging 2.7 Gpt Au, that should begin leaching by 11/21. Rumor has it that is going to return of .6 Gpt Au in solution. With a start up flow at 10.5 liters per second it's expected to return approximately 17.5 oz Au per 24 hour cycle.
Beware, there's going to be some people out there questioning how Mexus can come up with those numbers if the material is not yet on the pad and most of the material is still to be blasted out of the ground. But those folks don't have any proof that PT's numbers are wrong. They'll just try to smear Honest Paul's reputation by rehashing the 100% record Paul has of giving inaccurate averages, estimates and/or deadlines.
Obviously "timely" and "costly" are relative terms, but the whole Salty Gold Saga started in early October. The company already spent over 2 years dealing with it on the leach pad.
Its only been approximately 45 days since the ball mill strategy has been implemented. Additionally the PR claims the small leach pad area produced 134 oz. of gold in three weeks. That would annualize out to 2,322 oz of gold. At $1,500 oz that would be almost 3.5 million in gold sales.
I'd think that would be worth the time.
A quick recap of the Saga of the Salty Gold
October 5
Tests have shown that 95% of the gold in the silver chloride material can be recovered using the company’s gravity ball mill circuit.
As stated in its recent press release the company noted that its ball mill gravity recovery system would be used to recover this gold. The company can now state that gold recovery is occurring using this circuit and the results are excellent. In fact, as a result of these recent efforts, the company was able to sell gold with a net recovery of $9,339.85.
This remaining gold bearing chloride material is being run through the company’s ball mill gravity recovery system.
The ball mill is having difficulty running some of the material as it turns to mud during the process. The solution is to use a screen wash plant which Mexus already has on site. The recovery of the gold from this material is expected to take 45 days.
Mexus is still working on the material recently removed from its original heap leach pad which contains silver chloride. The solution to recovering the gold from this material is to run it through a wash plant.
Initially, the company had prepared one small leach pad area which successfully produced 134 oz. of gold in three weeks. Management believed that this plan could work over the whole pad avoiding the silver chloride areas. Unfortunately, this proved to be too timely and costly.
. How should a company determine whether project costs should be categorised as sustaining vs. non-sustaining?[-]
Non-sustaining costs are defined in footnote 3 to the WGC Guidance Note on AISC and AIC as follows:
“Non-sustaining costs are primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ where these projects will materially benefit the operation. A material benefit to an existing operation is considered to be at least a 10% increase in annual or life of mine production, net present value, or reserves compared to the remaining life of mine of the operation. Companies should publicly disclose the ‘new operations’ and ‘major projects at existing operations’ that are considered non-sustaining. ”
Where in that website does it say you don't need to know total reserves when calculating all in costs?
That was not an all in inclusive cost per ounce.... They are "Facts not relevant or essential to the matter at hand."
Let's try this another way.
For example, say it cost $10,000,000 to build out a fully operational mine (pads, buildings, processing plants, labs, etc).
How do you decide how much cost of that $10,000,000 is assigned to each ounce without knowing how many total ounces are in reserve?
If there are 1 million oz in reserve then it's $10oz fixed cost. If there are only 100,000 oz in reserve it's a $100 per ounce fixed cost.
The number of ounces in reserve matter when it comes to cost per ounce calculations.
In the formula the IRS uses, there is some kind of estimate to determine the average number of miles vehicles can be used in its life time. (Or in Mexus case, how many ounces of gold that can be expected to be prodcued from a particular reserve)
Also the biggest factor in the IRS determining a mileage reimbursement number is not fuel costs but depreciation. In order to calculate depreciation a starting and ending asset value is needed.
My guess is The IRS uses some kind of average cost of a new vehicle and an average trade-in value after "X" number of years when determining depreciation average values.
There's no way around it, a begining asset value (i.e. amount of gold reserves) is needed to be able to put forward a credible cost per ounce number.
Simple. You spread it across the number of ounces actually produced
The difference is in your example is you know the starting value of the car and what the approximate value the car will be in 5+ years when you want to trade or sell it off.
In Mexus case it has no ideaa how many ounces it will produce in a year, how many ounces it holds in reserve or how much material needs to leached to produce an ounce. How can you depreciate a reserve value if you don't know how much in reserves your starting with?
To use your anaology it would be like saying it only cost us .25 mile to operate this car. But we don't know how much the car was worth new or how many years it will last, but we know how much gas we use and what the insurance costs so that's how we determine the cost per mile.
At this point I'm not confident Mexus knows what equipment, fuel, chemicals and labor are needed to consistently produce gold. Yet somehow the company can provide an estimated cost per ounce.
The alleged test miner exemption/revenue reporting rules have nothing to do with calculating all in cost.
Avg cost can't be determined if you don't know the total number of oz in the ore body. How do you apply fixed costs per ounce if you don't know how many oz to spread that cost over?
I wonder if the principle clown has revised the all in cost of recovery of an ounce of gold ? What were his last figures ..... $400/oz, less ? I wonder if he understands the principle of 'all in cost" ?
Either way the current PR makes it sound like it isn't even being processed via ball mill or wash plant.
Funny how the company can make claims as to the recovery rate of the material before it actually recovers anything or, in this case, knows what method(s) will be used to recover it.
“We want to get the heap leach pad into production providing for continuous revenue. The staff at the mine will then be able to focus on the silver chloride material...."
New PR is out.
https://finance.yahoo.com/news/heap-leach-pad-mexus-santa-080000614.html
Mexus Gold US
Mon, November 9, 2020, 12:00 AM PST
CABORCA, Mexico, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Mexus Gold US (OTCQB: MXSG) (“Mexus” or the “Company) announced that the new leach pad at its Santa Elena mine in Caborca, MX is expected to be completed by November 15th. The company has stockpiled mineralized material with an average grade of 2.3 Gpt Au. This material will be crushed and placed as soon as the pad is completed. Mexus is using assay results to determine what material to place on the pad. The company has two technicians performing fire, column, and atomic absorption assays. Production from the leach pad is expected to begin returning gold by 12/1 with a target of .5 Gpt Au in solution running 35 Gpm. The goal is to increase this to 100 Gpm by January 1, 2021. Mexus is still working on the material recently removed from its original heap leach pad which contains silver chloride. The solution to recovering the gold from this material is to run it through a wash plant.
Mexus CEO Paul Thompson added, “We want to get the heap leach pad into production providing for continuous revenue. The staff at the mine will then be able to focus on the silver chloride material. I’m also working on a long-term funding plan for Mexus. This is necessary to move the company forward, eliminate any short-term debt, and increase the production capacity quickly.”
Yep. Supposedly all that was need to increase production was more carbon filters.
Then a Merrill Crowe was needed, then both. Somewhere in there we diverted to another property using VATs, now its a combination of electrowinning, MC and ball mill crusher with placer miner. There was also a small test baloon sent up about partnering with a company using a more "green" process, but that play fizzled quickly. My guess is that one will make a comeback if the ball mill doesn't yield the results promised.
The company likes to give the perception they are trying a new/different process that will work this time, but in reality they keep recycling back through previously tried methods crossing thier fingers that this time, if the right combination, or right process on the right ore body, it will work... maybe.
after cleaning up the gold laden “Mud” from poorly constructed initial pad nightmare
Good for you.
But I think that's overly optomistic. Anyone who bought in at .05 pre-split would need this to hit $1.00 before breaking even.
Those original investors who bought in at .10 need it to hit $2.00 before breaking even.
Not likely to happen from my persepective.
It's not the past mistakes. It's the lack of honesty, transparency and integrity shown by the company.
Mistakes are acceptable. Deception is not.
The issue isn't that Mar Mar was a mistake. They duped us.. fine we learn from it and move on. However, the issue is PT deceieved investors with knowgingly optomisitc and false PRs. I get that there were legal implications and a company is not going to put out a PR detailing the wrong doings of a JV while it's happening. The issue is that instead of just saying nothing, they put out deceptive PRs presenting a false preception of what was really happening.
If the mine was figuratively burning to the ground and he didn't want to announce it to avoid panic, that's fine. But don't deceive folks by telling them your bulding an addition.