have not called MVG since their CC... will be calling them back in about 2 weeks or so...
Yes, their mine plan is in serious trouble per the CC and it appears many investors are just taking their losses. MVG is dead money until 4Q. As of 2nd quarter, MVG cash cost was well above the POG instead of the $200 cash cost originally projected in their mine plan... MVG has now cut exploration/development staff and I am HOPING MVG can keep current mining at June production level with the reduced current staffing, and if so mine will be marginally profitable for 3Q on a cash cost basis. As long as Esmeralda mine is just marginally profitable, then MVG can continue to work out the kinks and I would anticipate a mine cash cost of much less than $300 per oz in 2005. The trouble is when your cash costs far exceed the POG like in 2Q, and since MVG has limited cash/working capital, then MVG can run out of cash real fast trying to get this mine to profitability... In hind sight, MVG needed a larger contingency fund...
In any event, I am still hopeful that MVG can break even or just incur a small loss for the 3Q in which case they will have sufficient cash to continue working out the kinks at Esmeralda. This is high grade ore but the thin veins are giving them big problems. Then I would envision/guess a cash cost under $325 in the 4Q04 and then well under $300 for 2005. But MVG can easily run out of cash before getting Esmeralda to breakeven and then profitability...
Ward and Neeley have gotten their prior mines through start-up successfully and hopefully they can do so again. But it is certainly not a sure thing at this point...
I will be giving them a call in a few weeks and try to better determine how they are coming along. You would think the Gemstone/Converse properties would support current valuation on a MCPRO basis...
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