It is no secret that working capital has been one of our ongoing issues for years and I see the potential for confidence to be restored with a comprehensive action plan such as this. The confidence inspired may then provide the catalyst to raise funds from the market at a reasonable rate (from a shareholder perspective), without having to further resort to "helicopter money" from the lenders of last resort.
Sirjonnyboy,
It sounds like you're in a tough position as you said. I take it that you have encouraged those around you to purchase shares as well, so I feel for you in that regard.
I am surprised though with your suggestions as far as cash-flow, making profit, restoring confidence etc.
These seem blatantly obvious & go without saying to me, but maybe you're saying it in a way that everyone can understand.
I mean, weren't all these objectives put in place as part of the Back to Basics strategy?
What I get from your comments is that, many aspects/ or all of Orinoco's plan of attack/ Business plan needs to be overhauled with a new plan produced & set of tasks implemented to increase probability of success. So basically a blank canvas and a revamp of many aspects of the company goals.
So now you're defining the problems. I suppose that's the first step, but should have been done back in Dec 2017.
The plan should have included a process of elimination for solving problems, Reducing risk in all aspects including back-up plans & temporary plan B's in the event of unforeseen barriers, Protecting cash in bank ( E.g. Not focusing to far ahead on exploration) Public relations including Shareholder Communication, Number 1 of all: Generating cash-flow via gold production which includes but not limited to Stock-piling, efficiency, Time management, cost of labour & equipment usage vs return etc, etc, etc.
Some comments I have heard here is that ogx would have been better off with just a couple of men with wheel barrows, picks & shovels and a 125 kg p/hr hammer mill. Sometimes I actually believe that.
Most business's fail because they try and expand to quickly as far as I know.
If it's not broken don't fix it. Why were HM1 & 2 producing gold? What has changed since then? The nature of liberating the gold or dilution?
If it's still viable, why not process with huge dilution for a smaller return whilst still making profit? Stock-pile the tailing's for ''Future Plant Plan''.
Shareholders aren't going to care if more tailing's are being stock-piled as they'll just see it as future money in the bank. Or are there other issues I'm not taking into consideration?
I still don't understand why they can't just get a large number of smaller hammer mills if that worked in the beginning. Is it a maintenance cost issue or is it just not suitable for recovering gold from certain areas that the gold needs to be liberated and recovered in a certain way? Again, why not suffer the dilution whilst still generating a profit?
It sounds like the high grade gold is currently not there in high quantities/ tonnes and that's why ogx are exploring. Because they know it will run out very quickly once getting serious with processing the ore.
Just do it! Just get that visible gold processed and that will restore confidence. Don't look to far ahead, just focus on priority goals and do whatever it takes to achieve them.
It's simple: Produce the gold and working capital won't be a problem, Share-holder confidence will be restored (Catalyst for raising funds) and other opportunities will present them self in time. It doesn't matter how it's done, just produce the gold viably. Is Cascavel not viable?
If it was me, I would minimise everything so that it's basically a small number of workers operating the company and focus everything on the short-term: Produce gold! Don't even focus too much on marketing etc. If Orinoco are producing the gold, then that will take care of itself. Look at NOVO's youtube video. Imagine how much that cost and what it returned!
I think ogx are smart in that they hired you because you have influence here on HC and are respected, so that takes care of a portion of attracting new shareholders albeit small.
But they just can't sell the story or talk it up. It actually has to be the opposite: Under estimate the forecast gold production & over-deliver.
This is what I think should happen given the current situation of ogx-
Exploration activities- Cut out all Exploration activities until a cash-flow positive comfortable buffer is achieved
Administrative, Insurance & compliance- Cut it down to the bone leaving only absolute essentials to operate + Eliminate marketing
Finance Costs- Not sure what this entails, but cut down as much as possible, only absolute essentials to operate
Project expenses- Don't buy new equipment & operate as a small team with manual handling when possible if it doesn't affect time efficiency vs return. Don't operate large machinery unless absolutely vital, same with lights, fuel etc.
Employee expenses- Unfortunately there would have to be a huge reduction leaving only a few.
The smaller the business, the lower the over-heads.
For example, If one person owned Cascavel & they chipped away at rock with visible gold all day using HM 1 or 2. How much gold could be recovered in 1 month? I know this is a crude example, but if the panel samples are so high then it sounds actually viable.
I think ogx should reduce the team leaving only the skeleton of the business & concentrate solely on producing the gold that can be accessed now, generating cash, paying back debt & preventing further debt & risks.
And of course........ Monthly updates no matter what!
I know these are all just basic and only covers a few points, but my point is to simplify & minimise everything so cash-flow positive status can be achieved. It doesn't matter how its done, all that matters is that is achieved.
