North Bay Resources Inc. reports that operations at the Ruby Mine in Sierra County, California are currently winding down to prepare for winter and the resumption of underground operations next spring.
This action is expected to significantly cut costs and reduce if not eliminate the amount of debt currently being incurred monthly to continue operations. Management believes the recent drop in our share price due to debt conversion is intolerable and overdone. With our market cap now reflecting an extreme discount to our intrinsic asset value, it is time to take steps to reduce our debt and let the market recover before we resume operations.
Management has also concluded that in view of recent operational setbacks it is time to take a pause to re-evaluate the mining plan and personnel prior to the resumption of operations next spring.
North Bay CEO Perry Leopold commented, "Last year when we successfully broke through to reopen the Ruby tunnel, we began to make the transition from what had been a rehab project to a mining operation. We needed to expand our crew and hire more men, our supply and equipment needs dramatically increased, and our monthly operating budget almost tripled. This was funded primarily by convertible debt with the expectation that we would be generating enough revenue by now to no longer rely on loans to finance the operation. We only have to recover 20 or 25 ounces of gold per week to break even, and anything more than that should be profit. This is a very modest amount, and should be achievable, but due to the recent setbacks at the South Terrace and Big Bend, it remains in the future. Had we reached that goal by now, all of what has happened recently to our stock could have been avoided, but now our debts are coming due, and with the approach of winter in the Sierra Nevada mountains, we have made the decision to take our foot off the gas, catch our breath, and take a pause to allow our debt to work its way out. This means not only reducing our debt, but avoiding new loans as much as possible beyond what might be needed to maintain minimal operations over the winter. We remain firm in our belief that the Ruby will be a profitable enterprise, and we hope shareholders will stay the course with us as we take steps to get through this turbulent period and recapitalize the company. We will keep shareholders updated of any new developments as we go forward, as well as to discuss our plans for resuming full operations in the spring."