You can quickly find SEC Guide 7 through Google, just a few pages long. Reserves can only be quoted if there has been sufficient information developed to show that the ore can be profitably extracted as you point out, and that it can be done legally such as permitting etc. Resources in USA cannot be quoted in SEC filings,but mineralized material - indicated and measured resources can,though not the ounces in this category. SEC frowns on companies promoting themselves with value of metals in the ground, and for that matter value of metals in the ground on nearby properties- for obvious reasons including calculations on cost to extract, capital required, and recovery of metals once extracted.
You will also see in SEC Guide 7 recommendation on how properties to be presented and what information to be included.This is normally the informatin to be included in a 10k. Companies of course dont always follow, but when SEC reviews 10k's etc, they can request amendments to meet requirements of SEC Guide 7 for mining and exploration companies.Many old geologists worked under old standards ( for example term "possible" reserves is no longer used for some years).
There is nothing precluding CGFI producing before establishing reserves, Endeavor began this way in Mexico several years back and did o.k., but generally considered more risky. Banks typically do not lend to mining companies without a bankable feasibility study showing proven and probable reserves and a reasonable Net Present value and Internal Rate of Return. In this case company has $2 million plus negative working capital, though a portion is in convertible debt and derivative liability thatwont be satisfied in cash.
Permitting delays are normal in this industry and any person with experience will know this.People who act surprized at this often didnt do their homework in the first place or use people familiar with current regulatory environment. Costs to construct new mill make an old mill that can be made operational a valuable asset, though one doesnt just flick on a light switch.
This is an interesting speculation the more I look at,but management hasnt provided basic simple information to evaluate whether it has a chance of producing in the latter part of the year as they forecast.
CFO needs to pay himself and for company to survive they need ongoing trading volume. This is biggest reason to speculate and trade this stock at this point, unless company can answer the most basic simple questions.Could be possible for explosive returns if they can start production in August then finance themselves through cash flow.
