Question to the well informed PRO SRGE'ers...
First of all, let me say that I am a long in this stock. I have been following the ongoing debate and have seen some very convincing projections about possible share value with an uplisting and other news.
My question to any long who is well informed and has done extensive DD (MOMORAPTOR - STERVC...) is the following:
Can you explain as concisely and clearly as possible why Bandera Gold's claims to Cinco Minas is wrong and that SRGE is the rightful owner? Have the courts in Mexico ruled yet?
This is a cut/paste from Bandero Gold's consolidated financial statements for the Years Ended November 30, 2011 and 2010:
Cinco Minas and Gran Cabrera Silver- Gold Projects, Mexico Effective November 15, 2005, the Company purchased an option (the “Option Agreement”) to acquire a 60% interest in mineral property rights in the Hostotipaquillo Mining District, State of Jalisco, Mexico, near the city of Magdalena (“Cinco Minas” and “Gran Cabrera”) from Minera San Jorge S.A. de C.V. (“MSJ”) by making option payments of $300,000 and issuing 2,800,000 common shares of the Company to MSJ.
BANDERA GOLD LTD.
Notes to the consolidated financial statements
Years ended November 30, 2011 and 2010
(Expressed in Canadian dollars)
10
4. Mineral Property Costs (continued)
To date, the Company has issued 1,550,000 common shares to MSJ with a fair value of $209,250 and fulfilled its commitment of $5,600,000 to finance the Cinco Minas project.
The Company has a remaining commitment to issue 1,250,000 common shares one year after the approval of the Joint Operating Agreement as referred to in the Option Agreement. The Company has also agreed to pay a smelter royalty of 2% on the sales of all silver and gold production, less smelting, refining and commission costs. Upon execution of the option agreement, the Company is committed to financing the following expenditures related to Gran Cabrera for exploration work:
$
Year 1 200,000
Year 2 300,000
Year 3 400,000
Year 4 500,000
Year 5 600,000
2,000,000
AND
10. Contingent Liability
On February 26, 2008, the Company commenced legal action in Mexico with respect to its interests in Cinco Minas and Gran Cabrera (the “Assets”). Compensation being claimed by the Company includes enforcement of the Option Agreement and damages arising from non-compliance by MSJ.
A court of law in Guadalajara, Mexico has awarded, as a preventative measure in favor of the Company, encumbrances which have been filed against the applicable assets and mining concessions with the Mexico Mining Public Registry (“MPR”). The outcome of the claims for remedies and damages is not determinable; therefore no amounts have been recorded in these consolidated financial statements. On March 7, 2008, the State Court, Commercial Division of Guadalajara, Mexico, issued preventive measures in favor of the Company consisting of: (i) the encumbrance of assets of the defendants for
an amount of 6,000,000 Mexican Pesos; (ii) the registration of the lawsuit on the files of each of the mining concessions subject to the Option Agreement before the MPR in Mexico City; and (iii) a prohibition for defendants, the legal representative of MSJ, to leave the Court’s jurisdiction (the Mexican State of Jalisco) until this case is settled, unless having appointed an attorney to act on his behalf while he is away. In order for these preventive measures to be put in place and stay
applicable, the Company was required to place a refundable warranty bond of $449,159 (2010 - $494,462) (6,000,000 Mexican Pesos) in order to respond to any damages and injury that the defendants may suffer as a result of the said preventive measures being put in place.
As at November 30, 2011, the Company is still in the process of protecting its interest in the Cinco Minas and Gran Cabrera mining properties in the Mexican courts. A ruling in favour of the Company by the Federal Court will affirm the Company’s ownership interest in the mineral property and amounts will become due in order to put the concessions in good standing; however as the amounts are not determinable no accrual has been recorded in these
consolidated financial statements. Should the ruling be in favour of the defendant, the Company would be required to recognize an impairment charge on the property for $9,601,891.
AI
