Colorado Goldfields Inc (fka CGFI)

[1manband]

An exploration-stage company can have a full feasibility study and can show reserves.

The stage page exploration is development stage. If, as you describe, an exploration company with a positive feasibility study that shows reserves can no longer be an exploration stage company, it must, by regulation, be a development stage company. And, if that were the case, Industry Guide 7 would stage as such. But it doesn't. Instead it says:

"Development Stage — includes all issuers engaged in the preparation of an established commercially minable deposit (reserves) for its extraction which are not in the production stage."

To be classified as "Development Stage", there are two important conditions a company must meet. First, it must have a feasibility study which demonstrates economic reserves. Second, it must be preparing those reserves for production. For many companies, particularly juniors, that is not the case.

There are many reasons why an exploration company with a positive feasibility may not immediately enter the development stage. Most juniors have no intention of ever producing themselves. Find it, prove it, and sell it. There is also the issue of money. A positive feasibility study is required to raise money to build a mine. That will, in most cases, take years. During that time the Company will remain in the exploration stage. There are other factors which may be at work, such as lawsuits which delay development. These days, there is a good chance some environmental group known as "friends of whatever the place is called where you want to build you mine" will file a lawsuit against you once a positive feasibility study is released. That can tie up development for years and is a common reason why the average mine these days takes over 17 years to open. Another reason may be that even though the feasibility study was positive, it was not positive enough to get the required financing. Previously, a mine could be built at an IRR of around 20%. Sometimes lower. These days, there are no mines obtaining financing at less than 30-35%. If your feasibility study is positive, but not positive enough, a company may have reserves but can't find the money to produce them. So, they continue exploration and production studies to find ways to increase the profitability. Those Companies will remain at the exploration stage because they do not meet the second requirement of a development stage company under Industry Guide 7 - preparation for production.