huge salaries or bonuses. Nor does management
devote the majority of the Company’s resources toexpensive promotional campaigns...Management is doing all the right things.Almost all company revenues are plowed back into exploration and mine development..
6.For years (1998-2006) LKA‘s Golden Wonder mine was one of only two commercial gold producers inColorado. The Company has all of the requisite mining, environmental permits and infrastructure in place.Its properties and equipment are fully paid for and exploration operations are underway.7.Due to the nature of its arrangement with the previous mine operators (a production lease), the GoldenWonder’s established reserves were mined (133,000 ounces) and no significant exploration was ever conducted to extend the mine's reserve's. In fact, no exploration has ever been conducted on this high-grade telluride gold deposit beyond the relatively small production zone….until now. To date, the width,length and depth have yet to be determined and geologists believe there is serious potential for establishing a sizable high-grade ore deposit…possibly greater than 500,000 ounces. The currentexploration program may very well resolve this question.
"The Golden Wonder Mine mineralization could also be related to a bigger hydrothermal system potentially linked with the Eureka Graben fracture system which played an important role in thelocation of some other gold veins known to the W-SW of Lake City area (Sunnyside, Idarado)."
Marie-France Bugnon, M.Sc. Manager, Exploration-Cambior, Inc. (July, 2006)
"Previous field geological studies and geochemical
sampling conducted by the author some distanceabove the Golden Wonder vein have
indicated telluride mineralization well beyond the presently-knownGolden Wonder vein
Delmer Brown, M.Sc. Consulting Geologist (June, 2008)
"There is no indication that the limits of high-grade gold in the vein zone have been reached either laterally on-strike or vertically down-dip."
Clyde Smith, Ph.D. Consulting Geologist(September, 2010)
LKA actually made a profit on exploration last quarter!
Upon resuming direct control of operations in the latter half of 2006 LKA began taking steps to return the mine to a commercially productive status. Since
the first quarter of 2009, LKAshipped ten bulk ore samples containing more than 1,439 ounces of gold. Average ore grades for Q-3 2011 were 1.96 oz.(55.6 grams) gold per ton… over 13X industry averages! Net smelter receipts for Q-3 alone were $468,892. While this is far
below the mine’s previous ore grade and production of 4,500 ounces per quarter ($7.6 million in today’s prices) it still
offsets a majority of LKA exploration expenses.. Investors should bear in mind that exploration ore sales are NOT
considered “Commercial Production” and there remains more to be done to establish a reserve base...(Not a big concern tous...when/ if they get production status, or even begin announcing significant discoveries and reserves from the exploration program, our members will already be well positioned!).
One more consideration, based on their industry affiliations