There has been some vigorous discussion about a possible negative source for the PEA being delayed. There has been some pretty firm indications from Dwight that the company(Marc L.) has the PEA in hand and is reviewing it, and some have viewed that as a sign that the PEA is not good in some way, and is being withheld while efforts are made to "fix" it.
If we look at the August 2012 Guidance from the CSA regarding disclosure of PEA's under NI 43-101 however, we don't see much indications of reasons to delay publication for negative reasons. In fact, If a PEA were really bad, a company could simply say, prior to the release of highlights, which GWMG has not done, that they were "re-evaluating the aims and conclusions of the PEA", and withhold it indefinitely or file it in the dustbin of history until they can come up with something that would work. In this light, putting the PEA on indefinite hold(for negative reasons) would appear to be the better course for the company. GWMG has not done this.
Here is the content of the Guidance report. Please read it carefully and keep in mind the purpose of the CSA, Sedar, the NI 43-101 instrument itself, and Provincial SEC's that must approve the document before it's Highlights and details can be published.
We see that the oversight of the PEA process is basically to protect investors from false claims, wildly over-estimated resources, unrealistic financial projections etc. In other words, painting a falsely optimistic picture of the company or projects future prospects in whatever production or financial areas that might be included in the PEA as better in some way than the facts support.
Let's go back to last year and review one more time what happened to ORT when they tried to publish their original PEA. It was rejected, and their market trading was suspended for 60 days. Something tells me that one of the review agencies thought ORT was optimistically overstating the facts in their PEA, not admitting to something they were not doing as well as they had hoped. Quote:
"by-product disclosure: The CSA consider the inclusion in a PEA of projected cash flows for by-product commodities not included in the mineral resource estimate to be misleading and contrary to the definition of a PEA.......
consequences of material deficiencies or errors: The CSA will generally request that an issuer correct any material disclosure deficiencies identified by the CSA in required documents by restating and re-filing the documents. Failure to do so may result in being placed on the defaulting issuer list, an order from a commission requiring the issuer to re-file the documents, or a cease trade order being issued. A correction to the deficiency may still result in enforcement or other regulatory action. The CSA also highlight that a review of a prospectus could take more time if issues such as those noted in the Notice are present, and the CSA may recommend against issuing a receipt for the prospectus."
So.... How does this apply to what we expect from GWMG's PEA?
One topic that has been discussed here was what kind of revenue might be expected from secondary product sales? We know that Thorium, phosphates, Au, Ag, and Cu are present in Steen's ore, and will probably result in at least some projected revenue at some point in the future. We will not see this in the PEA, but...It does not mean that such will not happen, just that it cannot be included in the PEA, so don't expect to see it.
On the other hand, "Consequences of Material Deficiencies or errors"(or the reviewing agencies interpretation of such), which is what nailed ORT resulting in their punishment, are directly related to a company such as GWMG, which intends to submit for approval a very positive document, with very positive financial and revenue projections, based primarily upon two things, the Steen's outlandish REE TREO grade percentages, including LREE, HREE, and good percentages of CREE, and the apparently equally unique revenue potential of their new strip casting furnaces at LCM.
I would submit that both of these specific claims, which are strongly backed by existing NI 43-101 compliant documents in the case of Steens, and 20 years of REE metal/alloy production at LCM, are flashing red light, screaming siren, waving red flag targets for skeptical reviewers from the CSA. Let's don't say they seem too good to be true. Let's just say they are simply better than any recent mining/metal producing company has produced in a while, and is considering submitting for approval. Now think about what happened to ORT, which is right in Marc LeVier's back yard, so to speak.
I think we see a very good reason for his reluctance to jump in head first without checking his facts, projections, etc, very, very carefully, as he would not wish to receive any of the punishments able to be meted out to violators of, shall we say, and abundance of exuberance at the prospect of good news. The better the news, the more scrutiny and microscopic analysis of the document will be performed by the regulating agencies.
As much as Marc and his gang in Saskatoon want to put the best light on their company, they must bend over backward, jump through flaming hoops, and prove to a higher standard than most submissions, that the contents of GWMG's PEA are not only positive, very positive if you accept even the most conservative of wwwater's fine work, but are iron bound, rock solid and factual to the highest possible degree. Period.
Remember the stories of relocating the administrative offices on site at Steens? They kept hitting paydirt on the preliminary excavations? Not just once, but twice, before they found a spot not sitting over Monazite? Sometimes an embarrassment of riches can be literal, when you want to just build an office, or publish a Preliminary Economic Assessment. It is no surprise to me that Mr. LeVier is treading softly and wants to be 101% sure that he is on solid ground when submitting this critical document, and I personally doubt that the delay is to "fix" some negative area of the report. That the report itself could become a big negative, as ORT's did, is sufficient reason, IMO, to triple check everything being claimed.
Please note that the above comments apply only to the question of "Is the delay the result of a negative development, or caution on the part of Mr. LeVier, based on the positive aspects of the in process PEA?" There remain other reasons that may also play a part in the delays we have experienced, such as desire to include the very latest assay reports, a desire to report that the BAR for Vredendal is approved, or production and sales from the new strip casting furnaces at LCM has begun, all anticipated positive developments expected in the near future, that would be incontrovertible evidence that the company is moving steadily toward it's stated goals that will be contained in the PEA.