QSplurge's narrative of his visit

So far, they have had to remove a lot of rock to get where they are currently. This area had bolts and rebar in it from previous mining contractors. The metal in the roof made it extremely difficult and is hard on their equipment. They have had seven down days over the past month due to equipment failures caused from digging into the metal. Bobby was working on the 4th and over the holiday weekend to try and get back on schedule. He is very dedicated to the cause. Bobby says there are a few things on his wish list. Number one is a conveyor belt upgrade. He says the existing 2700 foot long belt is workable but it is a little small for the job ahead. It will need to be upgraded at a cost of roughly $150K. He also wants to burn the existing site office down and replace it. The current office is an old mobile home but it gets the job done. He also mentioned why the mine has been shut down until recently. Previously the mine was red taped by the feds as mining regulations were tightened. Under the economic conditions at the time it was not feasible to do the mine upgrades to continue mining. I believe that I read in someone’s post who had talked to Eugene about a safe room needing to be built. Bobby says that a lot of time, work and money have been invested in this mine recently. This brings up an issue that has been questioned previously in this forum, working capital and where is it coming from. Bobby shed a little light on that. There has been a third party investor that has provided some of the working capital to date. He mentioned a name Tarun who I believe is the same Tarun Mendiratta who is mentioned in the Gwenco BK filing. The following is an excerpt from the BK filing. “National City Bank obtained a judgment lien against Gwenco and its assets. On July 19, 2006, National City Bank sold its right, title, and interest in and to the various judgments, judgment liens, security interests, and lines of credit, all of which are based on the notes issued to National City Bank of Kentucky, to the third party investor, Tarun Mendiratta, who is a principal in Interstellar Holdings. The third party investor has agreed to forbear on further collection, enforcement, and foreclosure with respect to this indebtedness until further notice. In connection therewith, Gwenco granted the investor a royalty on fifty percent of Gwenco's gross profits generated from coal mining at Gwenco's leased mine.” IMO… This National City Bank situation and the embezzlement/check-kiting by the former CFO of Quest, Fred Runyon and former CEO, William Wheeler is a major reason why Gwenco is in BK now. This may be why the company’s money dried up and they were no longer able to service their debt. It appears that Mr Chairamonte was able to stay above this situation and gain independent control of the company after this. But the company was successfully sued by the bank and the FDIC. Apparently this situation was settled and Tarun Mendiratta covered Gwenco’s financial liability in the matter in return for a share of the company’s future profits.
Sentiment : Strong Buy