Mexus Gold US (MXSG)

[8thaero]

WELL! After years now of total falsehood claims the Guide 7 Rule Test Mining no resource PM revenue exemption doesn't exist... NOW it does but yet so sadly still false misquoted. Own and my best examples show NEITHER claim PM product revenue . LKA sold bulk ore samples assumed in some profit to someone else to produce PM they had right to do with mineral rights owned. GITIT? You say so yo self. Mexus is into PM dore production which can only be expensed to explore/develop cost no resource proven. GORO used really bright but funny dodge of producing 2 ton supersacks of 3 types flotation powder shipped by semi truck for another to make metal claiming revenue often disputed by fraud weighting not possible with precise metal bars; copper/gold , silver /lead and near pure zinc. Gold silver and THREE, COUNT EM, base metals. Neither revenue sources are near equal to Mexus processing as commercial dore PM. THAT SHOULD END THAT NONSENSE FOREVER.... OR pick other source of revenue info, desperation to be not over and over false but true at last. Lotza luck!


"Mine Exploration Costs

Mine exploration costs are capitalized and amortized by the units of production method over estimated total recoverable proven and probable reserves. Amortization of mineral rights is provided by the units of production method over estimated total recoverable proven and probable reserves. Costs related to locating and evaluating mineral and ore deposits, as well as determining the economic mineability of such deposits, are expensed as incurred. All COSTS!!! related to mine exploration and expense WERE EXPENSED DUE TO to there being NO proven and probable RESERVES.


Since resuming operations in the first quarter of 2009, LKA has, as of the date of this Report, shipped and/or sold 13 bulk ore samples containing over 2,040 ounces of gold derived from exploratory mining operations. Ore shipments for 2009, 2010 and 2011 are as follows:



Tons Oz/ton Gold (Oz)

2009 88 3.82 337

2010 559 1.07 599

2011
539 1.46 787"


"This quote from a filing talks about how expenses are reported for an exploration phase company. It talks about how the company plans to report assets. It does not talk about being prohibited from reporting gold sales or revenue.

I have found other examples of exploration phase companies that were more than happy to report gold sales as revenue. Here's one"

: https://www.sec.gov/Archives/edgar/data/831355/000101041212000156/lka10kmbcommentsv2clean.htm";





Commercial Production

During our initial two quarters of commercial production, which occurred in the second half of 2010, we produced 10,493 ounces of gold at an approximate average cash operating cost of $217 per ounce, net of by-product credits. See, “Non GAAP Measures in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation” for more information.


Overview

We commenced commercial production July 1, 2010 at our El Aguila Project, part of our Oaxaca Mining Unit, generating $14.8 million in revenue for the year ended December 31, 2010. Prior to 2010, none of our properties were in production, and consequently, we did not record any revenue from the sale of minerals. We expect to continue to incur losses and may rely on equity financing to fund our operations, until such time as production is able to generate sufficient revenues to fund all continuing operations.

We continue to refine our ongoing capital requirements. Although we have no specific capital budget for 2011, we anticipate finishing Phase II of our tailings dam, continuing the development of the La Arista underground mine and incurring exploration costs. In 2011, exploration costs related to our El Aguila Project, El Rey and Alta Gracia properties are expected to be approximately $500,000 per month. As an exploration stage company, there is significant uncertainty in our estimates regarding both future costs and future revenue. We may require additional capital resources to complete our plans.

Exploration Stage Company

We are considered an exploration stage company under the SEC criteria since we have not yet demonstrated the existence of proven or probable reserves at our El Aguila Project in Oaxaca, Mexico or any of our properties. As a result, and in accordance with accounting principles generally accepted in the United States for exploration stage companies, all expenditures for exploration and evaluation of our properties are expensed as incurred. Furthermore, unless mineralized material is classified as proven or probable reserves, substantially all expenditures for mine and mill construction have been or will be expensed as incurred. Certain expenditures, such as for rolling stock or other general purpose equipment, may be capitalized, subject to our evaluation of the possible impairment of the asset. As required by the SEC guidelines, substantially all of our expenditures to date, including construction of the mill, have been expensed and we expect to expense additional construction expenditures in 2011 related to the Phase II tailings dam construction and the underground mine development at the La Arista vein system. Therefore, most of our investment in mining properties and equipment does not appear as an asset on our balance sheet. We expect to remain as an exploration stage company for the foreseeable future, even though we have reached commercial production. We will not exit the exploration stage until we demonstrate the existence of proven or probable reserves that meet the SEC guidelines.

Our accounting treatment as an exploration stage company regarding the classification of construction expenditures as an operating expense rather than as a capital expenditure, has caused us to report large losses during the last two years instead of building assets on the balance sheet. Although the majority of expenditures for the El Aguila Project were completed during the last two years, we expect underground mine construction and tailings dam construction to continue in future years. In comparison to other mining companies that capitalize development expenditures because they have exited the exploration stage, we will report larger losses or lesser profits as a result of this ongoing construction which will be expensed instead of capitalized for accounting purposes.

Exploration of our properties accelerated in late 2006, continued throughout 2010 during production ramp up and we expect them to accelerate again in 2011. From inception to December 31, 2010, we expensed approximately $29.2 million on the exploration and evaluation of our various properties, substantially all of which has been spent on the currently active properties known as El Aguila. In addition, we have expensed, from inception to December 31, 2010, approximately $54.1 million in design, engineering, and construction and production ramp up costs all of which apply to the El Aguila Project.