The Company's acquisition of the Remance property is on hold and highly uncertain at this time, pending the vendor's legal appeal of the Government of Panama's recent decision to deny extension of the Remance concession term. While the Company is keeping the Remance LOI in effect during Minera Clifton's appeal, it does not intend to sign a final agreement to acquire the Remance project unless the term of the concession is extended.
The Company will continue to curtail its exploration programs and expenditures in El Salvador until such time as PRES receives the El Dorado environmental permit and exploitation concession. The Company remains hopeful that it will either receive the El Dorado permit and mining concession or that it will be appropriately compensated. The Company will continue to seek opportunities for dialogue with the GOES aimed at resolving its permitting issues in El Salvador including receipt of the environmental and mining permits for the El Dorado project as well as re-establishing the exploration licence for Santa Rita.
The Company continues to evaluate new project opportunities in North and Central America.
The planned Phase 1 Hog Ranch drill program described above and in Section 2.2 is expected to cost approximately $1.5 million. However, commencement of this drill program is dependent on securing adequate future financing, and procurement of drill contractors and as such, its timing is currently uncertain. If the Remance project is acquired, the Company will require financing to undertake an exploration program, as per the terms of its Remance letter of intent that is anticipated to cost approximately $1.0 million. Additional exploration work required to keep all of its El Salvador projects in good standing, and exploration expenses related to the Company's generative programs, will continue through the remainder of fiscal 2013 and for the foreseeable future.
(The foregoing paragraph contains forward-looking statements regarding the Company's exploration plans and anticipated costs during fiscal 2013 and beyond, its efforts to settle the El Dorado permit impasse, and its requirements for additional funding. See Forward-Looking Information.)
General and Administrative and Legal
As a result of recently adopted measures aimed at reducing its staffing costs, the Company's general and administrative costs are expected to be marginally reduced during the remainder of fiscal 2013 following which they will stabilize. Additional working capital (likely through equity financing) will be required in the future to fund ongoing general and administrative costs. Expenditures related to the Arbitration claim are expected to be substantial as the case proceeds through the final phase. Though the Company has signed a service and fee agreement with its Arbitration legal counsel (as described in Section 2.1.4 of the Q3 2013 MD&A and elsewhere) that will preclude legal fee cost overruns, ancillary Arbitration-related expenses such as expert witnesses, court costs, etc. are less certain and may be substantial.
The Company will continue to seek opportunities for dialogue with the GOES aimed at resolving the El Dorado permitting situation. The Company and its subsidiaries have a well-documented history of supporting local inhabitants and building relationships with all stakeholders. This is a key component of the Company's approach to exploration and development, and will continue in all jurisdictions in which it and its subsidiaries operate.
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