Revised Final Environmental Study Report (24 MB) - Gold Canyon ...

Gold Canyon Resources Inc: Final Environmental Study Report Review
March 30, 2013
5.12 GCU Preliminary Economic Assessment and Stock Volatility
Stakeholders are concerned that GCU will not have sufficient funds to cover the costs
associated with rehabilitation of the eastern corridor in the event that Springpole
exploration is no longer viable.
The GCU Preliminary Economic Assessment was released on March 25, 2013; 1 week prior
to final submission for ESR comments. The following is the indicated and inferred gold and
silver mineral resource identified at Springpole to date:
GCU: Management Discussion & Analysis, August 31, 2012, page 7:
Classification Tonnage
(million
metric
tonnes
Gold Grade
(grams per
tonne)
Silver Grade
(grams per
tonne)
Gold
Contained
(million troy
ounces)
Silver
Contained
(million troy
ounces)
Indicated 128.2 1.07 5.7 4.41 23.8
Inferred 25.7 0.83 3.2 0.69 2.7
Based on the below information extrapolated from GCU documents posted on the GCU
website (www.goldcanyon.ca), Stakeholders would like to know if the below references to
company evaluation are correct and if sufficient funds are available to pursue road
construction, operation, environmental monitoring and rehabilitation activities?
Q3-Financial Statements, Nine Month Period Ended August 31, 2012:
According to the most recent financial statement issued by GCU as of August 31, 2012, the
3 rd quarter statement indicates GCU has $11,493,769.00 (Cdn) working capital, $12,
749,732.00 (Cdn) cash and $24,450,978. 00 (Cdn) accumulated deficit.
“Going Concern of Operations: The Company has not generated revenue from
operations. The Company incurred a net loss of $3,340,521 during the nine months
ended August 31, 2012 and an accumulated deficit of $24,450,978. As the Company is in
the exploration stage, the recoverability of the costs incurred to date on exploration
properties is dependent upon the existence of economically recoverable reserves, the ability of
the Company to obtain the necessary financing to complete the exploration and development
of its properties and upon future profitable production or proceeds from the disposition of the
properties and deferred exploration expenditures. The Company will periodically have to
raise funds to continue operations and, although it has been successful in doing so in the past,
there is no assurance it will be able to do so in the future (Q3-Financial Statements, Nine
Month Period Ended August 31, 2012, page 8).”
Investors have raised concerns regarding weak GCU share price (April 1, 2013:
$0.48/share) and higher than normal trading volume. GCU has also made public that the
company only has $10 million (Cdn) in reserve (an amount that would barely cover
summer operation costs) and does not communicate the $24,450,978.00 in accumulated
deficit. Below are recent excerpts from GCU’s website (www.goldcanyon.ca - accessed April
1, 2013).
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