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Bringing a traditional mine online is taking longer. A significant amount of that time is spent doing exploratory work. However, Mexus supposedly by-passed that exploration step under the rationale they knew there was minable ore based on historic mining that occurred on the properties and because many of the surrounding properties had demonstrated minable ore.
You can't have it both ways. You can't say we'll do this cheaper and faster by skipping some of the "unnecessary" foundational work. Then when things don't pan out, try and play it off as okay because the "average" mine startup takes this long.
Mexus skipped the exploratory work, has missed (on multiple occasions) with production and is now floundering, because it has no (or very little) exploratory data to work off of.
I, personally wouldn't front the money based on that kind of business plan, but it's not a complete crap shoot.
With that being said, one would think anyone who would take that risk would keep the project on a short leash and not keep throwing money at it, year after year.
Mining companies typically fall into 1 of 3 categories;
Explorer – Looking at geographic areas that present a high probability of having high enough levels of minerals/ore that can be recovered in a profitable manner. Doing drilling and other studies on the area to establish potential profitability.
Developer – Building out a mine on an explored piece of land that has been deemed likely to able to be mined profitably.
Producer – In production with sellable product being produced and sold on a consistent basis
Operations showing the amount of loss for the length of time Mexus has typically fall into one of the 1st two categories. At this point those companies would have data either proving or disproving proof of concept and would know if they are throwing good money after bad, or if there is a pot of gold at the end of the rainbow (bad pun intended).
Mexus has none of that information to show for all their money spent thus far. (Yes they have a drilling study, but that was paid for by Argo, not Mexus).
Granted, Mexus has been honest in that they are not approaching mining in the traditional sense of doing all the exploratory work because of its confidence in the claims based on minable levels proven in surrounding properties. But that hasn’t happened. So now what?
Now Mexus finds itself in the spot where it has spent as much money as traditional mines would have in exploratory work, however, it has produced only a negligible amount of product. This is the time that all that prep work would have paid off and investors could, at minimum, take comfort that the previous money was not wasted, but an investment because it provided knowledge to the operations to help it mine profitably.
So yes, other mines do show losses on their way to production, but those losses typically provide information to company on how to get to profitable production. Mexus’ losses have not provided the company with any information it can use to build out a successful mine. So they go back to square one and hope and a pray that it might get lucky next time.
It's also interesting there is a 10% gap between the bid and ask.
I must say, I'm surprised at how well price held up this week given the announcement the amount of authorized shares had been tripled.
Why do you think RNVA is being manipulated and how do you think that is being done?
Why would the company also be paying security if it has no money and no gold?
From April 16 PR, Mexus President Paul Thompson states that the company has contracted with a security firm to provide 24-hour services at the mine site.
Is this second hand information or are you on the "private forum". Also, is the forum on ihub? If so, why is ihub allowing selective disclosures to happen on it's website?
Additionally, the increase in shares wasn't "announced" by the company. They just quietly filed a PRE 14C.
The relevant point in this for investors is the company does not see the increase in shares as a positive or it would have been included in a PR.
Whatever happened to the infamous 250 pounds of zinc-ladened gold precipitate? I'm curious why, after all this time, it hasn't been sent somewhere for additional refinement?
You don't sit on something like that while taking out high risk loans, you try to get what money you can for it. Makes me think it wasn't salvageable after all.
There are some maps on the company website. Nothing too detailed but general locations.
MXSG Website - Properties
If I understand correctly there are 4 "properties" Santa Elana, Ures, San Felix and now Sanora (aka Mabel).
Each property might have different "concessions".
For example Ures has El Scorpio, Ocho Hermanos (8 Brothers), Edgar 1 & 2 and a couple other concessions.
San Felix has San Carlos, Phoenix, Marco 1, Marco 2 and a few more.
If you're keeping score - Santa Elana was the debacle with Mar Mar, San Felix was supposedly producing, but allegedly our JV was stealing from us. Now 8 brothers is our next adventure.
Another reason to authorize new shares is to use them in a merger/acquisition.
People do things for more than one reason
After all, they just did a private raise of capital from a group of shareholders.
Curious how other shareholders feel about the increase in shares.
I should probably cool down before posting, but this move has me beyond upset. With the stroke of a pen Paul and Don have effectively taken half of investor's money in Mexus.
Anyone who bought into this hoping for a dividend check someday, just had their potential dividends cut in half. Anybody who bought in at .05 - .10 (or higher) will now likely watch a majority owner buy up another large chunk of share for less than 1/100th of what you paid for your share.
There are no checks an balances in this company for the common shareholders. There is no board of directors, only Paul. There is no voting power for shareholders, except Don.
At the end of the day, its on me. I was aware of the company set-up and still invested. It was a bad decision and a lesson learned. Anyone looking to get into this stock should reconsider.
It was put out in a PRE 14C. Since the majority stock holder approved it, no shareholder vote is needed.
Mexus PRE 14C Filed 6/8/18
More mixed messages from the company.
The addition (dilution) of authorized shares should give you pause about the company's confidence in the 8 Brothers VAT system producing any real income to fund operations.
Also, note in the PR about 8 brothers the CEO made no mention of the VAT system being profitable, only that, "this operation will enable us to increase production quickly as we gain knowledge and efficiencies.”
Not saying how this will definitively play out, just pointing out the company is saying one thing while their actions demonstrate something else.
That is correct. However.... if those request for private placements include discussion of future business plans, or current status updates of the property that have not been disclosed to the General Public, it becomes selective disclosure.
It's a fine line that a company already struggling with transparency issues should not be flirting with.
My re-entry point will be .005 at the highest. And even then it would depend on a PR with a plausible outlook and plan being released.
Who'd a thunk I was so wrong 21 years back and still in error with #4 being readied at original 100% owned (that's us!) Ures site this very week
Private placements are not debt. They are purchases of shares at an agreed-upon price point, usually discounted to the current rate.
If the gold is really there, Mexus track record with previous JV's wouldn't be a big issue for a new JV.
The rub is establishing the gold is there. The method in which Mexus has tried to go about bringing Elana into production means the normal protocol of feasibility studies has not been performed. (Not saying that is a good or bad thing, just the way Mexus has tried to go about bringing the mine online)
So either the JV needs to come into this with a little bit of faith and tolerance for risk, or a willingness to do (pay for) some additional drilling.
I would argue there is likely a direct correlation between the credibility of the JV and insistence that additional drilling be performed.
Why is there a need for a partner? The VAT system at Ures was going to be a quick and inexpensive set-up ready to go by June 1st.
Over a month ago all the equipment was supposedly on site. All it needed was assembled hooked up. Once hooked up there was supposed to be a 72 hour leach then drained into the Merrill Crowe for recovery.
The reason Ures was being started up was because Mexus already owned the equipment for this project and will only need diesel, cyanide and other miscellaneous parts to begin production.
Agreed.
However, it is interesting the volume in the days prior to the announcement was pushing 1 million per day, yet price stayed at the .016 - .018 range.
Someone is supporting/holding up that price level.
Can someone explain why they are trying to get the Ures mine up and running when they have so little cash? Are they still working Santa Elena, or is that shut down due to an environmental problem?
Couple of questions stemming from your and LTT's previous post this morning.
1. Why do you feel the appropriate price should be .10? Based on current situation I feel the current price is at the midpoint of where it should be (.005 - .03).
I base my price on;
- Lack of JV - no clear path to consistent production.
-Low/no cash on hand and no cash flow other than private placements, stock dilution or high risk loans.
- In ability to successfully process material on leach pad to sellable dore.
- Very limited feasibility study/drill reports.
- In mid 2016, with a JV in place and seemingly making good progress, things were looking up for Mexus. Even then it only sported a .06 share price. Mexus is no where near in as strong a position as it was then.
At this point in time the odds seem to favor that Mexus will not be successful with production before they run out of money.
2. LTT- why do you say no more convertible loans ever? If that is true, why was this last one necessary?
...a principal sum of $166,667 plus one-time 10% interest charge of $16,667 which matures on May 14, 2018 for $150,000 in cash.
I'll own up to it. I was wrong. I didn't think they had paid it off.
Certainly good news for those invested.
Curious why the amount paid was $183,333. I thought the amount repaid was supposed to be $166,000.
Your reasoning is spot on. Be sure any future decisions you make are based off of fact (as best as you can verify) and not rumor.
For example, the maturity date of the loan was May 14. That is fact - verified in an SEC filing. However, how long the company has to make good on payment after the maturity date has not been factually determined. Some say the maturity date is the due date, others say the company has 1 week. Both are speculative opinions.
Opinions are being shared as fact by all sides. When making a decision to buy, sell or hold, make sure you've worked through what is fact and what is speculation.
A lot of longs still trust PT. They may have good reason to do so. For many of the same reasons you mentioned in your previous post, I have concerns with how forthcoming PT has been recently. Neither view is right or wrong. It's up to your individual tolerance for risk/reward.
I'll admit it if I'm wrong. But right now everything I've seen states the note was due May 14.
Also, not to nitpick, it is paying of the Convertible Promissory Note but it's not paying off debt. More accurately it's refinancing the debt with different lenders under different (hopefully more favorable terms).
Loan is due on 21 of may.
If it does hit .01 then we will know for certain that the loan was not repaid, but converted into stock.
That only reinforces my point. Even with those favorable assumptions it's still implausible Mexus can get to $1.00.
So even if an optimistic investor thinks Mexus can still pull gold out of the ground - and do so profitably. The dilution of stock has been so great that the amount of gold they have to produce to get share price to $1.00 is likely impossible.
Depends on how it got paid.
Was it by more lending from the toxic lender or by private placement?
In either scenario it would still depend on the terms of the loan or private placement.
IF payment were made, wouldn't the company want to disclose that ASAP in order to stave off selling?
Thinking about this more, how many shares does Mexus have remaining to issue? Based on current market cap, the company has over 800 million outstanding shares.
Two observations/concerns investors should be monitoring;
1. Control of company. With the need to issue more shares to cover the toxic debt is there a risk of Paul losing control/ownership.
2. I don't see how Mexus ever reaches a market cap of almost 1 billion (what would be needed in order for shares to reach the vaunted $1.00 mark). For reference, at it's peak, GORO had a 1.7 billion market cap. However only it has only 57 million shares outstanding. Most of the reason it was able to get to $30 per share was because it was paying a monthly dividend of $.01 - .05.
2.a - In order for Mexus to pay a $.01 dividend on 1 billion shares Mexus would need to have a net (profit) of, at minimum, $10 million (equivalent of 7,700 oz of gold at $1,300 oz). Assume a mining cost per ounce of $500 an ounce (which is extremely low) it would take a minimum of 12,500 ounces of gold produced to make a $.01 dividend payment.
Hmmm... I didn't realize the conversion price wasn't a fixed price set at the time of default.
So if anyone is thinking about getting out, it's now or never. Once the lender has 66+ million shares start hitting the ask, this thing is headed sub-penny for good.
Thank you for the explanation. Any insights on how long the lenders would draw out the sale of stock?
I would assume they point of using an MM is so they don't immediately "tank" the share price. However, 66 million is a lot of shares to sell off. Even if they sold off 200,000 shares a day it would take the lender about 1.5 years to unload all of their stock.
I was mildly surprised there wasn't a PR today regarding the status of the loan repayment. As with many financial happenings with this company, we will have read the tea leaves and speculate. In other words, if Mexus did make good on it's repayment, share price should remain stable. If not, we will see the stock price tank due to the stock being dumped onto the market by the lender.
I'm curious how long it typically takes for the lender to officially take possession of the converted stock it acquires and start "dumping"? I wouldn't expect any significant action today, but wasn't sure about the timing of the conversion process.
Non-dilutive means the terms of the loan do not involve the issuance of stock.
The current note that is due on Monday IS dilutive. If Mexus can't pay back the $150,000 plus interest ($166,000 total), the lender gets paid back in stock. However, the repayment in stock isn't at the current share price of 1.6 cents. It's at 50% of the lowest price during the last 25 days - which was .005 cents. So repayment will be at .0025 cents per share.
If Mexus can not pay back the note in cash on Monday, the lender will get 66.4 million shares of Mexus stock. Which they will likely immediately dump on the market.
According to a previous post from Wxdog (post number 24984)
Mexus is attempting to raise $250,000.
The assumption is $150,000 (with interest it's more likely $166,000) of the raised funds would go to paying off the previous loan due on Monday.
The company is offering 12% interest as an incentive to lure prospective investors.
None of this was put out in a PR. My guess is Mexus e-mailed previous investors with this offer.