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There's been nothing in the local newspapers these past few days. I've written the company twice with questions about the status, no response at all. Yesterday I found the e-mail address for Jaramillo and wrote to him also. No response thus far.
Dellucci, I didn't get a response from the plant manager. I wrote to El Sol de Parral (a Parral-based newspaper I read every day) earlier this week and they sent a reporter to interview the plant's operating contractor (Sr. Gregorio Carbajal) about the current situation at the plant. The newspaper's manager replied to my letter with the information I published last night. El Sol also published an article about the plant based on its interview with Sr. Carbajal in Tuesday's edition of its on-line newspaper.
On or about 5 December, the plant manager gave an interview to a reporter from El Monitor de Parral, another local newspaper I read every day. I got the information about the tonnage in the plant for processing from the article El Monitor ran based on the interview. I'm sorry if I gave the impression I had talked to the plant manager directly, I have not done so.
I try to always communicate in writing because I want a record of who said what to whom and when. I try to use newspaper sources when I can because they are disinterested (independent) and knowledgeable third parties, and they have people on the ground who can put eyes on the situation and see what the real story is.
As to my take on the situation, I'm becoming more concerned every day that Lone Star Gold is not what it says it is. My concern stems from the lack of verifiable information coming out of the Company about the status and progress of its operations in Mexico. The company's failure to keep its investors and the investing public informed about its operations does not even make good business sense to me. There is no legal or regulatory reason that keeps LSTG from reporting any material fact about its operations. I'm going to hang in there for now, but I will not be increasing my position until I see something positive about this company's operations that I can verify from an independent source.
Here's the text (in Spanish, sorry) of a reply I got from the manager of El Sol de Parral this evening:
"Estimado señor Tomasviejo, en relacion a sus dudas en torno a la operacion de la planta de beneficio Luis Escudero, de acuerdo con los datos que los directivos de la citada empresa han comentado esta se encuentra funcionando al cien por ciento y dan el servicio a los mineros que tenian su material depositado en sus instalaciones ademas de otras que van llegando."
Translation: The plant is functioning at 100% and providing services to the miners who already have material deposited in the plant as well as to others who are bringing material.
This is confirmation that the Government plant is fully and completely operational. LSTG's material should be in the hopper next week, no excuses.
The plant manager, ing. (engineer) Alberto Corral gave an interview to El Monitor on 5 December 2012 in which he stated that there were 8800 tons of material in the plant for processing. See my post #1000 for additional information, but he didn't say to whom the material belonged. If LSTG really does have 6000 tons in the plant,as they have said, then by Sr. Corral's reckoning all other miners have 2800 tons. Even at 300 tpd, that's about nine days' processing. So LSTG's material should be in process by next Tuesday, 23 April, even if the plant processes all of the other miners' material first.
This is the number for Servicio Geologico Mexicano (SGM) in Parral. The SGM is the Government organization that actually owns the processing plant. Maybe the SGM can help in contacting the plant.
Tel: 011-52-627-522-2994.
I looked into this the first time LSTG made the claim they were in negotiations with a second processing plant. The bottom line is there is no other nearby processing plant that would have capacity to spare for LSTG, and until very recently, LSTG has not had cash to cover any up front payment a processing plant might demand.
No pictures of activity. The only picture accompanying the article was a picture of some storage tanks inside a gate to the plant.
Sunday, 14 April, 2013: El Sol de Parral published an article in its overnight edition that states the processing plant "Luis Escudero Chavez" is operating 24 hours per day and is now processing 300 tons per day (tpd). Its operator (Sr. Carbajal) stated in the interview he gave for the article, that the plant would reach its capacity of 500 tpd within two weeks, with the hiring of additional personnel and the operation of a fourth mill which is installed but is now idle while additional personnel are being hired. The article goes on to say the engineers are receiving material for analysis. It does not specifically mention the operation of the cyanide treatment or flotation treatment sections of the plant. Sr. Carbajal is also quoted as saying that the miners can get advance payments for materials delivered to the plant, and that they can get assistance in transporting their ore to the plant.
Here is the link:Parral Processing Plant in Operation
The plant itself is not a myth. It exists, and you can see it on Google Earth. It is also listed in the official records of the Federal Geological Service of Mexico. There has been plenty of independent reporting on it, with pictures.
The new operating contractor, one Sr. Gregorio Carbajal-Villalobos, has not been exactly a ball of fire when it comes to getting the plant operational. He's got the money, and he's a big player in the local economy. He's a major investor in an auto parts assembly plant that will employ 3,000 people when it begins operating next year. He's obviously got the political connections, too. It's not clear why he's not got things up and running yet. The two local newspapers I follow have completely stopped reporting on the plant.
Yesterday, I wrote to El Sol de Parral, and asked them to tell me whether the plant is operating or not, and if not, to tell me which elements are not operating. I also provided them with some information about the operations Lone Star Gold and Amiko Kay claim to have in and around Parral. Maybe they'll check this information out, maybe not. One can only hope. The paper was very prompt in replying to the first note I sent them, but they haven't answered my questions about the plant yet. If and when they do, I will certainly post the answers for all to see.
I haven't found anything relevant in El Monitor or El Sol today. The papers are heavily reporting on the political situation, punctuated with the occasional crime story.
The new contractor, Sr. Carbajal, has become as invisible as Sr. Amaya-Medina was before the contract was taken away from him by the Governor.
It's great that some of you seem to have gotten good responses to your questions from the Company. I have not had the same experience. The lack of information from the Company is as disappointing as it is inexplicable (and inexcusable), but I'm in this until the fat lady sings. I can hear her warming up now. I just can't make out the tune yet.
JR11. Agree, because of the date of the imagery, the wash plants is the only thing related to LSTG that it could be.
I have that paper on NSC leaching. Thanks.
I hope LSTG will provide a bit of disclosure soon. They could sure help themselves a lot by just being a little more communicative.
I have been checking El Monitor and El Sol today. No news on the Government plant so far. Political news (local elections) seem to be dominating the coverage this morning.
Still looking for more details on the design of NSC leach plants.
Thanks. I did look it up. The Saleslogix suit doesn't appear to have been resolved, but there is a judgment against Mr. Kennedy in the other suit, and apparently he didn't contest it. I didn't see any information as to whether the judgment has been satisfied. Do you happen to know whether or not it has?
The imagery was taken on 5 December, 2012. So the wash plant should be visible on the new imagery. If I zoom to an eye altitude below 6500 feet, detail begins to blur. Still, pickup trucks and small buildings are visible, and I can see the statue in the plaza at Villa Escobedo. I've got zero background in mining, so I'm not sure I'd know what to look for. However, the new area across the paved road west of the tailings pile sure does seem too small for a heap leach pile. Could it be the wash plant?
There is new imagery of Parral on Google Earth this morning. The imagery date is 5 December 2012, so it should show some changes at the tailings pile related to LSTG's activity there. It does show that an arroyo west of the tailings pile has been turned into a flat surface at the head of the arroyo and two ponds are downslope from the flat surface. Image resolution is not great, but this is definitely different from the way the arroyo looked in 2010 (the latest image available before today). The rest of the tailings pile and surroundings look unchanged.
There is no news one way or the other about the processing plant today. That's not unexpected, as the newspapers are focused on reporting on Holy Week events, and much of the commercial activity in Parral has ceased for the Easter Holidays.
AJAZ31, Thanks. I have that paper, and I think it describes the conventional approach to heap leaching. The only chemistry it discusses is sodium cyanide-based. It is a good description of heap leaching problems and practice, especially for a novice such as myself.
I've been looking in every place I can think of in an effort to find a description of this "benign nitrogen leaching pile process." I've found nothing, and LSTG has not responded to my inquiries on the subject. I'm ready to conclude that there is no such process, and as I believe you said in an earlier post, the only N associated with heap leaching is the N that is in the cyanide.
The closest thing I've found is the "nitrogen species catalyzed pressure leaching" process, which led me to speculate that this process is what the company is planning to use. That is pure speculation on my part, because no one at the company has provided any process details for this new plant. The chemistry and process described in the paper I referenced in my earlier posts do not seem to be compatible with heap leaching.
Thank you for the reply. I certainly am interested in finding out what is real about this company, its people, and and its product offerings. I have a small long position in ECAU, and I hope to see it prosper, but I think it has a hard road ahead of it to bring a product to market and become a profitable going concern. Its success is by no means assured. It will be interesting over the next year to see if Mr. Plotke and the veterans of Bright Automotive who are on the ECAU leadership/management team have learned anything useful from their previous ventures, and if they can apply those lessons effectively going forward.
There is a description in the paper, a link to which I sent to JR11, of a complex of Au with a metastable sulfur ion. I have to confess that when I took basic college chemistry, I was more interested in creating some chemistry between myself and one of the co-eds than I was in my chemistry classes themselves,and that was longer ago than I care to admit. So chemistry is somewhat unfamiliar territory for me. However, the central idea seems to be that the gold will form a metastable complex ion (AuS(5)-) with this S(5)-2 ion that the author says will exist in a solution containing sulfuric acid when pH is <8.5, and this can be used to advantage to recover gold from the resulting solution.
As JR11 said, the predominant precious metal to be recovered from the tailings is silver, and the way the author of this paper proposes to get silver out of the process stream is to precipitate it as AgCl. I gather this is done by treating the solution first with sulfuric acid and sodium nitrite in a closed reaction vessel at really pretty low temperature and pressure to get silver sulfate in solution, then with a sodium chloride solution to precipitate the silver as AgCl, leaving a sulfuric acid/sodium hydroxide solution (pH <8.5) in which any elemental sulfur dissolves and the metastable gold-sulfur complex forms. The author of this paper claims the reaction kinetics for the conversion of the metastable sulfur ions to stable forms are very slow, allowing the gold (if any) to be recovered from solution by electrowinning or other standard refining techniques.
There is a discussion of a commercial application to recover copper and silver by this method (with a process flowsheet) here:
NSC Pressure Leaching
Now none of this matters if this is not the process LSTG plans to use. I hope they answer your phone call with a good description of the process they do plan to use, and at least some description of the plant they are building. It would be great to see a process flow sheet, at least. Surely they've got one by now, if they're already sending money to the JV to build the plant. It would be great to see that on the web site, along with any recent (within the past six months or so) photos of the work in progress at the tailings pile they can get up there.
I'll see if I can find a design drawing or at least a photo of an existing NSC pressure leaching plant, and post a link to it. I have no idea whether or not this type of plant is what LSTG is proposing, since they have not responded to my request. They may be planning to use Nitric and Sulfuric acid solutions on a heap leach pile for all I know. I haven't seen any report of that having ever been attempted, though.
FYI, I've not seen any reporting in El Monitor or in El Sol on the Government processing plant one way or the other. I last checked about five minutes ago. Holy Week celebrations seem to be the focus of reporting today, with little business news of any kind. Violent crime seems to be taking a day off also.
The closest thing I've found is Nitrogen Species Catalyzed (NSC) pressure leaching. Here's a link to an article about NSC pressure leaching that talks about its application to precious metal extraction:
NSC Pressure Leaching
There are a number of others at varying levels of technical detail. I have had no luck at all finding a description of nitrogen heap leaching after several months of searching. I asked LSTG for a description some time ago, and have received no response to date. Maybe you'd have better luck.
Thanks for the tip. I checked out Jason Plotke, or at least the companies he has been involved in, on the Arizona State Government's web site. He's been involved with eight companies between 2000 and 2013. Of these eight, one (Plotke & Roemer, LLC) has been dissolved, two (KM2 Manufacturing and IAG Holdco) have had their certificates of good standing revoked for failure to file annual reports. A fourth, IAG, had its certificate revoked for the same reason in 2009, but apparently is now in good standing. So, of the seven surviving companies, five are in good standing.
I found one very negative customer review of IAG, from April, 2009. I didn't find any other reviews at all. Any business is going to generate at least one unhappy camper among its customers, so I'm not disposed to give that review a lot of weight by itself. As the reviewer suggested, I dialed the number listed for IAG. It has indeed been disconnected. Since the review was written in 2009, I surmise the company went out of business some time in 2009. I also looked up IAG in the yellow pages online. It is listed as closed. The reviewer cited the bankruptcy filing of KM2 and several associated entities in 2006. That might explain the failure of KM2 to file annual reports from 2006-2012, which is the reason they are not in good standing.
I could not find a listing for Echo Automotive in the Scottsdale, AZ online yellow pages listings. So, although the company is apparently in good standing in Arizona, I can't tell whether it actually has operations there. Since Mr. Plotke is working with Echo Automotive in Anderson, IN, I think it probably does not.
I did not find anything that appeared to be related to Mr. Plotke's businesses in the records of the Arizona civil court system, which puts summaries with judgments rendered online and makes them available to anyone.
So now I'm wondering, exactly what facts do you have to assert that Mr. Plotke's even got a "shady past?" I see some business failures, to be sure. While that doesn't inspire confidence, it speaks to his competence, not to his character. Who knows, he might have learned from those failures...
The company's finances are shaky, right enough. They've got to fix that, right enough. That's going to be their big problem to solve near term, right enough. Welcome to the OTC market.
You also say it's not clear the Echo Automotive technology is cost-competitive. I'd love to see the analysis that led you to that conclusion, if you'd care to share it.
Based on what I can get from the two local newspapers I follow, The Government down there seems to be meeting violent crime head-on. For example, about a month ago, some armed citizens attempted to confront an Army unit in Jimenez, a town north and east of Parral which seems to be particularly vexed by violent crime. It didn't end well for the citizens, and the Army made no apologies. The Governor has been very visible, has stated that the Government is determined not to lose control of the province, and has made security for the population a priority. The police do seem to respond when a crime occurs. The quality of the response is hard to judge from here, but I do see a number of reports of drugs seized, perpetrators arrested, and significant prison sentences meted out. People do seem to have confidence in the police, as there has been only one reported incident of vigilante-type "justice." Elsewhere in Mexico, in some remote areas, the population has armed itself and has basically kicked the police out because the people do not trust the police to protect them. That's not happening in Parral. I don't think it is likely to happen.
As to the business climate, there is a new and very large auto parts assembly plant which is being constructed in Parral to serve the international market. There is a new municipal market either in planning or under construction. The Government is investing in Parral. Public buildings, roads and bridges, the water plant and of course the mineral processing plant have been or are being repaired and improved. Two other international mining companies (Endeavour Silver and GoGold) are doing business in Parral, and show no signs of leaving. My take is that crime is not deterring investment or business activity, or at least it has not up to now.
It does seem to me that violent crime is increasing in and around Parral. I haven't kept count, but my perception over several months is that the rate of murders and assaults reported in El Monitor is higher than it was last Fall.
I've been following both El Monitor and El Sol pretty closely the past two weeks. I've not found any update since the new contractor was chosen and promised to reopen the plant this week. I will post as soon as I see something related to the plant or the small miner's association in either newspaper.
You keep saying they need to come up with $2M to "complete the deal." You seem to be saying they have to have $2M by Friday. Is that what you're saying?
Here's what the 20 February announcement said: "The venture calls for an initial investment of two million dollars cash and stock to support the first two projects. Both companies will not only benefit by increased revenue and bottom line earnings, but it will also increase shareholders' value in both Companies."
The way I read that, they can close the deal with zero cash or stock, provided both parties are willing to do so. The investment is needed to enable the joint projects to proceed, not to "complete the deal," if by "complete the deal" you mean establish the JV. They can establish the JV and then go off together and try to raise the cash they need.
I'm there with you. I'm holding the small position I have until I see something a whole lot more tangible than what I've seen to date. I'm cautiously optimistic, but I need to see revenues.
I think a lot of investors, me included, are in the same place you are. Let's hope this new contractor keeps his word. If so, we are close to seeing the results of processing the LSTG tailings. Given favorable results, LSTG is on its way to becoming a viable mining business.
There is nothing new in El Monitor or El Sol today so far. Big economic news seems to be the groundbreaking ceremonies for a new auto parts plant in Parral that will employ up to 3000 people when it's finished. The same businessman (Sr. Carbajal) who will operate the mineral processing plant is also one of the big wheels behind the auto parts plant.
You're welcome. If this new contractor really gets the entire plant working next week, not just the mills, and it gets to 500 tons per day (capacity) by the end of the first week, It won't matter much who goes first. Of the 8800 tons of material the plant administrator said he has on hand in the receiving bins, 6000 belongs to LSTG. Then the rest will be about 6 days' processing at capacity. By the end of March, LSTG's material should be in process,and revenue payments to LSTG should follow by maybe the end of April, if not before.
One can only hope LSTG will file an 8-K to announce the first sale from their material at the plant.
Today, 18 March, 2013, El Monitor reports that a new operating contractor has been selected for the processing plant. The new contractor, one Prof. Gregorio Carbajal Villalobos, is a businessman and teacher in Parral. The paper interviewed Prof. Villalobos, and reports that he said the plant would begin operating next week. There is more to the interview, and the link to the Spanish-language article is below.
New Operating Contractor Selected
Never mind. I found what I was looking for.
I missed that one, thanks. The article is an interview with David Dajlala, who is the representative of the Federal Economics Minister for Chihuahua, I think. It reiterates several of the things that were promised to the miners by the Government in a meeting in Parral earlier this week. Sr. Dajlala said the plant would reopen in the next few days, but he did NOT say it would reopen in 15 days. He stated that the miners had been given a loan (a line of credit at a bank, not named) which was really an advance against sales they will make when the plant reopens. He also said the line of credit is not easy to get. He stated the Governor's commitment, and his own, to support and strengthen the mining industry and the economy of Parral.
I checked the site again about a minute ago. I didn't see anything related to the restart of the plant or the small miners. El Sol servers seem to be down at the moment.
El Sol de Parral is reporting that the State (Chihuahua) has made the small miners a loan against future production from the processing plant, and has promised the miners that the plant will be operating within 15 days.
I am cautiously optimistic. The State could operate the plant itself, or it could turn to a company like Penoles, a huge, vertically integrated silver producer which obviously has both the capability and the resources needed, and get a company like that to do it thru a sole source contract on the basis of critical need. All a company like Penoles would need to get started is a letter of authorization from the Government. Clearly there are ways to get this done, and the Governor wants it done very much. Still, 15 days sounds like not very much time to me. It might take a bit longer, but it sounds like it's going to be a matter of days or weeks, not months before the plant restarts.
Here's the link:
Small Miners Meet With State Government in Parral
I can't tell whether he does or not from the press reports. I'll send a note to Mr. Ferris and mr. Carr and ask them.
Today 12 March 2013, El Monitor reports that a meeting between the small miners' organization and personnel of the Economics Ministry of Chihuahua, as well as other Government officials including the mayor of Parral, occurred in the offices of the La Prieta mine. No word on the outcome of the meeting, but at least the miners and the Government appear to be talking. I think the Governor is having an impact.
I found this on the CPOW web site. If this visit actually comes off as scheduled, and if its outcome is good, CPOW could finally amount to something.
Here's the link:
Chongqing Grain Group CEO to visit CPOW
I cannot find IPRC or any of its named subsidiaries in the operator database of the Texas Railroad Commission as the operators of any disposal well anywhere in Texas. I checked the list of every operator of every disposal well in Wise County. None of the entities named as subsidiaries of IPRC are listed. I cannot find an injection well disposal volume report (H-10) for a well in Wise County, TX operated by any of the entities that have been associated with IPRC in the press releases that have been issued by the company, its SEC filings, or its web site. There should have been records indicating injected volume by month beginning in September, 2012. I've asked the company for assistance. Does anyone on this board have additional information that would help me to do some due diligence on this outfit?
Another short-seller performing a public service for those of us who are too dumb to know when we're being had? Thanks for your help.
Nothing new in El Monitor or El Sol today. See post #1518 for the last news update on the situation. I check both newspapers from time to time during the day, as they sometimes post new stories online.
I'm with you on that, JR11! Here's hoping the logjam breaks and we start to see the LSTG material being turned into revenues, pronto!