There are a lot of different thing in play here, and although the word “bankruptcy” is not a good word under any circumstances there’s more than one way this whole story can finish; I’m not going to try and second-guess, but suffice to say that CGK.v is not some sort of Enron or WaMu with a Himalayan mountain of debt and virtually nothing in the assets column. I personally feel there are more chapters to be played out with this story and will be watching things very carefully. The mineral and the renovated processing plant at Coricancha are, again in my persoanl view, too valuable to ignore and the combination will be used in the future to make metal.
However, I did receive the following mail from CGK.v IR guy, Jason Mercier. He has also kindly allowed me to re-print it here on the blog. So without further comment from me what follows is the hand of Jason Mercier. I currently do not hold CGK.v stock by way of full disclosure.
1. Management firmly believes that our team would have provided the best opportunity to return the mine into production. It took a lot of hard lessons to understand this operation and that will all be lost without those people being involved.
2. No one can accuse the group at Gold Hawk and Compania Minera San Juan of lack of financial commitment or commitment to restarting the Coricancha mine. Management, Directors, Officers and employees (including me) put a total of CDN$1.2 million into Gold Hawk since the ground displacement issue arose in May 2008. That includes $150,000 the CEO personally contributed to make payroll and pay other crucial expenses at two different points. Unsecured; he just wrote personal cheques. Insiders own well over 10% of the shares. There are some employees who continued to work for the Company unpaid. We all believed and with each achievement, success got closer.
3. The biggest concern going forward is who will continue to treat the acid water from the mine as this needs to be treated before being discharged or it will contaminate the Lima water supply. Frankly, non-compliance would risk expose to liability (beyond the liability of paying to move the legacy tailings, ensuring the stopped hillside remains stopped, adequate site security, etc.). During the time when the plant was in production we got a lot of attention from inspectors due to our location close to the capital and the history of the operations there. I do not expect that to change. There are many operations on that river in non-compliance but Coricancha is in the minority because we A. have a permit B. are under the allowable discharge levels.
4. Our lenders have not advised us on next steps in the process and we cannot speculate. There is no question though that the fate of the Coricancha mine now lies with the lenders.