Skye MDA March 14 2007
Collection of statements from Skye Resources’ (CGN-their fully owned subsidiary) “MANAGEMENT DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2006″ — As of March 14, 2007.
Not going to comment on any of them at this very moment, just wanted to move them closer to public domain. I will add my bolded emphasis here & there though…
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To Skye’s knowledge, none of the resource and reserve estimates are materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
To continue development of the Fenix Project beyond this point, we will need to raise additional funds.
On November 13, 2006, the Company’s Board of Directors announced that it decided to initiate the financing and development of the Company’s Fenix nickel project on an independent basis. The announcement followed a review of strategic alternatives available to the Company and its shareholders, including the potential sale or merger of the Company for which no proposal was received, announced on August 30, 2006.
Cutfield Freeman believes that over 60% of the total funding requirements of about US$ 1.1 billion (including working capital, cost overrun facilities and interest during construction) can be funded through debt.
A prospective investor or other person reviewing Skye for a prospective investor should not consider an investment in Skye unless the investor is capable of sustaining an economic loss of the entire investment.
(below is in the ‘risks’ section)
Skye has no history of operations
Skye has no history of operating revenues and is experiencing negative cash flow
CGN’s exploitation and exploration licences could be affected by events outside CGN’s control
The mineral exploration and exploitation licences and surface lands on which CGN is carrying out its activities may be subject to governmental intervention, third party land claims, rights of indigenous peoples living in the area affected by mining operations (including any failure by the Government of Guatemala to carry out a satisfactory consultation with affected indigenous peoples under International Labour Organization Treaty 169 and the local municipal law), and title may be affected by undetected defects. The existence thereof would have a material and adverse effect on Skye, its business and results of operations.
The Fenix Project is located in a foreign country
The Fenix Project is located in Guatemala and, as such, is susceptible to certain risks including currency fluctuations, political or financial instability, exchange controls, aboriginal issues, changes in mining taxation and regulations, export controls, changes in permit and licensing requirements, delays in the issuance of permits, embargos, expropriation, and environmental issues all of which may materially and adversely impact Skye’s business.
Working within local communities could be problematic
CGN’s exploration and mining operations will have an impact on the communities in which they are situated and will depend for their success on the support of those communities. While CGN is committed to consulting and working constructively with local communities on such issues as safety and health, opportunities for local people and long-term sustainability there is no guarantee of receiving the support of these communities.
On September 16, 2006 three parcels of land owned or leased by CGN were illegally occupied. Subsequently, two additional parcels of land were occupied, one on October 3, 2006 and the second on October 4, 2006. The apparent objective of these invasions has been to obtain land for housing and subsistence farming and, because land invasions are not uncommon in Guatemala, to give focus to its unresolved land tenure issues. On January 8 and 9, 2007, the local District Attorney directed the removal of the groups from Skye’s property, carrying out a Guatemalan judge’s order. These occupations have caused no material interruption of the project, although some remediation of exploratory drill sites was delayed pending resolution of the invasion of one site. Since January, dialogue has recommenced with the majority of the people involved. Skye remains committed to building good relationships with the local community.
