Replies of the President of Markray Corporation to investor questions
January 26th, 2014 , Moscow
Mr. President , thank you for taking the time to answer our questions. I represent a group of minority shareholders of Markray Corpotion, and my first question :
Please tell us about how the company had been existing between 2011 2013 and what will happen to shareholders in the new 2014?
You quite accurately describe your question with the word "had ." You?re right it?s correct to say that the company had not been working but existing. And the very fact that we are now talking with you about the company , I believe it to be a success of our management team. And I?ll explain it. I will have to tell you a little about our history . Those who research our company know that we (we - a Russian company ???????) came to the stock market in May 2010. Maybe we?ve chosen not the best time for this, but what happened is happened. Merger between the Russian company ??????? and R'Vibrant was executed by a third entity, Westmount Capital Corp. As a result of the share exchange , the one shareholder of the Russian company ??????? became the majority shareholder of the public Markray Corp. Westmount Capital also received a large major minority shareholding of Markray Corp.
I should say that the transfer of such a large major minority shareholding in an outside consultant was a kind of advance, as his major task was to attract investment in the project of building a technological complex for processing technogenic dumps in the Roshal?s area(Moscow region). Our task was to prepare the work of technological regulations, employing qualified personnel, making engeneering communications to be ready to process, and building an object if it?s finansed. Furthermore Westmount Capital was becaming the exclusive representative of Markray Corp. in negotiations with investors , we were told that it will be done very quickly and efficiently.
I bring to the attention of the shareholders for the two years of so-called "responsible and qualified" job of our consultant it was invested to the company? $ 14,000 so-called "investment"! My question is how do you think this is sufficient for the construction of process equipment at a cost of 5-7 million dollars? I think the answer is obvious. With this situation, we, the top managers and I, as President, were strongly disagree. Therefore, we called qualified lawyers and we conducted an internal corporate investigation, which had a result to cease all relations with the Westmount Capital company. We broke up peacefully, thus forcing our former partner to transfer all the shares from the merger to the company's management. Thus, we have formed a stock of shares to be offered to a strategic investor or sold on the free market, there isn?t still the final decision on this matter .
I do responsibly assure all the shareholders, existing and potential, that all received financial resources will be used for the construction of a complex for processing technogenic dumps; a very cent will not be rate by the Company?s tops or questionable consultants. And all I want to say is that we will always speak honestly and openly with our shareholders and the public on the status of the our Company. This is our principled position. Previously, we often heard from our consultant: "You do not know how to behave on the exchange , but we know what and how to do." We, unfortunately, listened and believed . As long as our patience is over. We also become more actively listen to the people on the company?s forum that in principle was the starting point to the beginning of the action, which I have mentioned above.
So Markray Corp. - production company or not?
My answer is as follows. To say that we - production company in the general sense of the term - probably not. We are the most venture company with great potential for growth. We were really processing small amounts of raw materials, but this processing was mainly outsourced . We did some work on our equipment , in particular the Dore bead production, but as the process of extracting gold is a question of constructing the process chain , so in this perspective, the work was done only in terms of outsourcing .
In fact, frankly, we have just completed the process of building technological regulations. It has both objective and subjective reasons. In particular, subjective factor was that our Department technological experts for a long time could not give a priority to one of several options for a process chain, and only at the end of 2013 it was finally approved. Objective factor is that science are running out. New technologies appeared for production from our efel cinders such a valuable component as transporent iron oxide having a large market potential. But six months ago we could not even imagine that it is possible to produce this product, and even more of it is that we didn?t possess the technology of its receipt. We do now, however, it took a lot of time and effort. We believe in our process model, and we feel quite comfortable in it. The most important question that the head of a company needs to ask to himself, - " To what extent management understands what he is doing ?" I think now we know it clearly.
What processing volumes did you outsource?
Volumes were quite small, most likely it can be characterized as a " sharpening " of technology and evidence of a presence of gold, silver, platinum, iron, transporent iron oxide pigment and rare earth metals in dumps .
What do you think the prospects of development of the company ?
Today we are searching for the investor. It doesn?t matter if it will be a strategic and portfolio investor, he will be offered a stock of shares of approximately 30% . But there is an option, we may input the shares into a free market and to accumulate funds. Most probably, we'll start with the first option, then with the second one. It?s possible to combinate options, we will act on the situation . We will be releasing liquidity products with lower cost than our competitors. I even frankly cannot call our company mining, but rather innovative because practically we will use a future technologies." I think the ones who look forward will be interested in the prospects of investment in our company.
Mr. President , why are you sure you can attract a potential investor ?
Everything is quite simple. My confidence is based on three points:
1. Markray Corp. is good standing. The technogenic dumps (efel cinders) exist, any investor can come and see for himself.
2 . Historically gold is a very liquid asset, it is a source of gold reserves of any country, it?s a hedging instrument and raw materials for an industry.
Facts of the last global crisis sufficiently convinced us in it. We all could see how a price per troy ounce of gold grew up in this period. Big institutional investors and funds was buying big quantities of gold as insurance against liquidity shortages. Gold has always been and will be liquid commodity. Gold has guaranteed sales, at least, in Russia. Central Bank and its authorized banks buy gold accounts set prices linked to the London fixing prices. So the question of gold sales, at least, on the domestic market is not worthy.
Transparent iron oxide pigment is a valuable raw material for an industry. That are automotive paints, wood laquers, plastics and so on. A price ton of this product is $ 2000 , and we have it in the presence in about 9 million tons, you may count it yourself .
In my opinion, it?s not worthy to speak about iron ore pellets. It is desirable for any raw steel production . By the way, we have reached agreements with a number of metallurgical plants for the supply of this raw material.
3. Chemical composition of efel cinders is confirmed by authorized expert organizations, such as the Central Institute of noble and rare earth metals; Russian Chemical Technological University of Mendeleev. National Research Technological University MISiS prompted us an idea of ??extracting transparent iron oxide pigment. Our experts studied technological features of the receipt of the product in the laboratories of the University. At the moment samples of our raw materials are taken and passed preprocessing in the Center of expert systems of technological audit of subsurface use of "Research and Innovation company ?Center - ???????". We expect results of analyses within a month.
4 . Than we now are engaged is very ecologically perspective direction in development of Russia; still nobody is engaged in it, we are some kind of pioneers, we make the first steps and carry out the pilot project. Reserves of such raw materials type in the Russian territory more than 300.000.000 tons, that potential of development is huge. We plan to take out the patent for our technologies and widely to extend our experience.
That's why I?m sure. And again I want to emphasize that the most important thing is to attract everyone. Payments for the tops should depend on the performance of the company. If the company is moving forward then all win, the shareholders and management. Shareholders are interested in building a growing company by the tops. Top managers are now motivated to make decisions positively, faster and more decisively, because they aren?t bounded by any obligations.
I can often hear the verdict that technogenic dumps are radioactive materials and the area around Roshal is dangerous for living?
That's not true. Roshal is one of the ecologically pure cities in Russia. Go to the city website, and see for yourself , it's not a site of Markray Corp., which many people try to criticize, sometimes fairly. This is the site of the city, everything is written in simple language. That?s right, during the Soviet era there were the chemical plant, but in the 90 years it was closed. Our employees live in Roshan with their families, and swallows that make nest on the slopes of dumps, do not live in a polluted environment. So these allegations are without any foundation .
It?s claimed that that Markray Corp. is possibly a former AURUS Corp., the company that had received delisting , whose investors lost money , is it true?
No, it's not. I did not know about the existence of AURUS Corp. till my officers show me the material in our forum. I was disappointed with it?s content . You know , it's hard to say ? I am not camel?, by my staff are tired to speak the a manifest truth already. We do not want to prove anything. We are sincerely sorry for AURUS Corp. shareholders, but this is a market, there are ups and downs. Sometimes me just want to give a part of our company shares to these people only to stop to spoil an image of Markray Corp. Indeed, many investors begin to wonder, what if there is something wrong here ? And this is not good as we speak. In the near future on the Board of Directors will discuss the situation happened to AURUS shareholders and we?ll inform the public about the decision.
And a personal question, how do you work on this status? Do you regret that you could not do something?
It?s hard to work, if to be honest. Every day I learn something new. It?s my first expirience in a public company, there?s every day as a test or an exam, and I haven?t taken exams for a long time already. I regret to look back and reproach myself that I trusted to decide the fate of the company in the hands of an incompetent consultant. If we had acted alone, I'm sure we would have not only received fundings, but also had started the production complex. Alas, the lost time won?t be returned. But, as Jeremy Newman , head of BDO says, you should always look on the bright side of life, otherwise it would be too sad.
And finally, do you believe in the future of the company ?
If I did not believe we would not have this talking now. It?s left for our future investors, shareholders to believe in it too. I can guarantee that as long as I remain President of the company, it will be absolutely clear and transparent to everyone. I?m an adept of openness and honesty, so we are the public company.
And yet, I wish everyone who follows our company to be healthy, happy and successive in the coming 2014. God bless you!