Lets look at the situation:
Neither Ron Guill nor management could foresee or expect this "bump in the road" of a water treatment facility costing $10-$15 million.
Guill, originally got into this project with upfront cash of $10 million (5 stock, 5 loan) and a promise to bring the mine to production at expected costs of $18 million. as we all know, that number grew to $24 million and now also requires an additional $10-$15 million for the water issue.
Guill obviously bit off more than he expected to chew. Realizing he is in over his head, he is trying to get out while not losing his shirt. TLR had to take back over the project and figure out a way to finance it. (allowing him to bankrupt and default on his obligations would not have been pretty as some have suggested)
Bottom line, TLR needs $10-$15 million for the facility and whatever cash ($2Mil? + stock) that theyre giving Guill now in exchange for his 50% stake.
And with this cash crunch, posters are whining about management selling the drilling subsidiary saying that they "shot themselves in the feet" selling off a revenue producer?
It was making them just $1 million a year! they need at the very least $12 million NOW! Did you want them to twiddle their thumbs for 10-12 years waiting for the $1mil/year cash to be generated from the tiny profitable drilling to pay for the treatment facility?! The sale of TDI was not the problem. The cash crunch from an unforeseen need for a water treatment facility is the problem.
The only REAL complaints anyone should have against management is 1)downplaying this as a "bump in the road" water treatment facility. This is a major problem from the cost perspective/cash needed immediately. 2) Management continues to minimize the details to let us investors know whats really going on. (i.e- real timelines, production schedule anticipated, etc)
Separately, I have a simple math question for everyone:
I keep seeing posters use 40K ounces as the consensus number for production if Butte ever gets online.
If TLR management says Butte has 450-500K ounces in the ground, and the CURRENT as of March permit application submitted states they anticipate a mine life of ONLY 5 years, doesnt that mean they expect to mine 90-100K ounces of gold per year?
In all fairness, FYI, I continue to HOLD LONG my shares praying this whole mess works itself out SOMEHOW, ANYHOW.
I have emailed the company twice this week to get clarification on the "completeness" response of the permit from M DEQ. This was vaguely referrenced in the 10Q.
They dont want to respond - not sure why - maybe its not public information.
More shareholders need to blow up their email boxes with questions or place calls and maybe we will start to get more facts.
Wonder if anyone would ever try to take this company over - would be a good way to fire the management team. I'll call Icahn later...
I for one have never gotten down on TLR for the sale of TDI.
however, it was making some money, and with the current senario, any income would be better than none. It could have been leveraged at this point for more up front cash.
that said, I agree that the water problem could not have been reasonably predicted in advance. However, for Guill to be bailed out because he "miscalculated" the risk of the project.... is this good business or just too much goodwill?
For someone who was supposedly very savy about mine construction, this seems to me to be a big mess.
I continue to hold my long position as well as there IS gold in the ground. this is not a fantasy.
However, the entire house of cards is still all about the permit. We need the hard rock permit NOW!
I agree about the unforseen costs of the water facility.
first off you numbers are off on butte.
750,00 oz of gold over 10 year mine life that is recent information.
secondly you speak of 1 million for TDI.
Thats Profit! after all other expenditures.
Like property leases, like management and other day to day stuff. and money for exploration on Neveda Thats all gone now. so your 1 million you you speak of is the profit, all the other money paid for the other stuff.
That is why the drilling bus was so important to keep.
So wheres that money going to come from now to pay for that stuff bud.
The drilling business generated 30 million a year in revenue! That was all TLR expense money!
Everything they pay for now will have to be through debt!
This company will bleed to nothing.
As far as we know there maybe to much water for them to even remove hence denying the permit for good.
Not a pretty sight.
Next time you right something down you better get your numbers straight.
Im glad you think 30 million a year is nothing.
Even though some that money went for drilling repairs and payroll, but not all of it.