RESULTS  Q1 (Jun-Aug, 2012) 1.81g/t      

RESULTS Q2 (Sept-Oct, 2012) 1.22g/t

The gold equivalent production during Q1 has slightly decreased in ounces of gold equivalent compared to the previous period due mainly to the effect of metal prices.

Metallurgical recoveries of silver during Q2 have declined due to a lower percentage of mineralized material coming from the San Francisco Project and the volume from Florida NW being increased. Recoveries from Florida NW continue to be impacted by higher contents of manganese in the mineralized material coming from Florida NW.

Contractual Obligations

E-Energy Ventures Inc. and United Coal Holdings Ltd. (formerly Cooper Minerals Ltd.) (collectively the "Partners") are entitled to a minimum monthly distribution of $25,000 per month, free and clear of any and all costs or expense of every kind and nature; whatsoever, incurred in connection with the operation of the Mina Real Property. The minimum monthly distribution amounts are credited against the Partners’ 20% share of the net profit of the Mina Real Property and Santa Fe Property. The payments are not dependent on the profitability of the properties and shall be payable even if the properties do not generate any profit.

During the three months ended August 31, 2012 the Company recorded distribution payments of $150,000 and accrued interest of $6,953 to E-Energy Ventures Inc. and United Coal Holdings Ltd. As at August 31, 2012 the distribution payable of $1,109,087 remained outstanding of which $34,087 is accrued interest.


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