Week in Review: A Mining & Exploration Retrospect (Dec 1-7)
Lawyer wants to cross-examine Bre-X wives
A lawyer representing Alberta investors wants to know what happened to $95 million that two families received from the Bre-X fraud. The multi-billion-dollar mining scam hit the fan in 1997 and the company filed for bankruptcy in 2002. On Tuesday class-action lawyer Clint Docken told media he wants to cross-examine Ingrid Felderhof, ex-wife of Bre-X chief geologist John Felderhof, and Jeannette Walsh, widow of founder David Walsh, about affidavits the women made concerning their financial situation.
According to Tuesday’s Calgary Sun, Docken told court that the company founder received $25 million from investors while the chief geologist got $70 million. Ingrid Felderhof lives in the Cayman Islands. Jeannette Walsh lives in the Bahamas.
Docken told the Calgary Herald he also wants an appraisal of a Cayman Islands mansion the Felderhofs bought 15 years ago for $3 million.
“It’s important to know what it’s worth now,” the Herald quoted him. “That’s an asset that should be taken into consideration. If this claim is successful, she may have to sell it.”
Lawyers representing bankruptcy trustees Deloitte & Touche want the suit dismissed, saying there’s no money left. The Calgary Court of Queen’s Bench adjourned the case to May 30. The Herald also stated that Ontario has a parallel class-action suit underway.
Darryl Stretch’s downfall
Solid Gold Resources [V.SLD] announced on Monday that it replaced outspoken CEO Darryl Stretch. According to a company statement, the BOD appointed director/chief financial officer Alan Myers interim CEO.
Stretch courted controversy several times after coming into conflict with the Wahgoshig native band and the Ontario government. He said the Wahgoshig wanted him to fund a $100,000 archeological study prior to drilling claims near Lake Abitibi in northeastern Ontario. Saying the company couldn’t afford it, he told the Globe and Mail last March, “It’s not my obligation to go find arrowheads for those people, period…. If they don’t like you, you don’t work.” That outburst followed a January court injunction ordering him to suspend drilling and consult with the Wahgoshig band. The company filed for leave to appeal, arguing that consultation wasn’t a legal obligation.
The Wahgoshig, in turn, filed a claim in February against the province and Solid Gold. According to a company statement, “the claim states that ‘the mining act does not establish any requirement on the Crown or the holder of a prospectors licence to consult or accommodate aboriginal communities’ therefore the act ‘is unconstitutional and of no force and effect.’”
According to an August Solid Gold statement, “While the company was restricted from operating in the area, the [Wahgoshig First Nation] used information obtained from Solid Gold during the consultation process to stake mineral claims over an area approximately six kilometres long and 500 metres wide, bordering the Solid Gold property.”
By September, a judge granted Solid Gold leave to appeal the court-imposed drilling suspension. The judge, according to a company statement, wrote that he saw “no basis in the facts of this case for an imposition of a duty to consult on Solid Gold. If the Crown wishes to delegate operational aspects of its duty it must establish a legislative or regulatory scheme. The mining act does not presently contain such a scheme.”
Such a scheme was already underway. Under new rules to take effect April 1, the province will require companies to consult native bands prior to early-stage exploration drilling on Crown land. The bands will have 30 days to express concerns, which could then block a permit.
Stretch responded, “These rules result in a total transfer of all natural resources to the control of hostile third-party governments. It is my opinion that Canadians must do everything possible to stop this ill-conceived race-based initiative.”
He repeated his remarks about “hostile third-party governments” at a November symposium of the Ontario Prospectors Association in Sudbury, according to Northern Ontario Business. He further angered native participants by displaying a “racist” cartoon. Two native chiefs denounced the OPA and an Ontario group called Miners United as “racist and radical.”
Northern Ontario Business quoted OPA executive director Garry Clark saying, “I wasn’t exactly happy with what [Stretch] was saying but it was his point of view.”
According to the March 27 Globe and Mail story, Clark said some native bands charge companies per drill hole, or per metre of drilling, in confidential deals that often surpass $100,000.
A November 23 Northern Ontario Business story said the Wahgoshig band has “three impact benefit agreements so far, with others to be finalized in the near future, and has 17 memorandums of understanding.”
The article quoted Wahgoshig chief David Babin, “We have other agreements with companies and we are workable. When companies work with First Nations, they start to understand the value of where we come from. We are not totally against development.”
Northern Ontario Business added, “Babin said if Solid Gold came under new ownership, his community would be willing to meet.”
Greenland open to foreign investment, foreign labour
Mining legislation passed by Greenland on Friday will make it easier for foreign companies to import workers for new mines in the semi-autonomous country, according to a Reuters story. The new law defines large-scale projects and sets a minimum wage for foreigners that critics say will undercut local rates.
Considered resource-rich but relatively unexplored, Greenland has attracted considerable global attention in recent years to its base metals and rare earths potential. About $100 million was spent on mineral exploration last year, Reuters stated.
One of the larger players prepared to take advantage of the new legislation is the British company London Mining, which has a $2.3-billion iron ore project near Nuuk, Greenland’s capital of 16,000 people on the southwest coast. London Mining hopes to attract Chinese investment, Chinese markets and Chinese workers—some 2,000 of them, which would increase the island’s 57,000 population by over 4%.
According to a November 5 Reuters dispatch, the country currently has just one operating mine, a gold producer.
They all say that
Energizer Resources [T.EGZ] pulled off two praiseworthy feats on Monday. The company released an impressive maiden resource for its Green Giant graphite project in Madagascar. And it refrained from its usual boast about the world’s largest deposit.
To give the company credit, statements were qualified with conditional words like “would be,” “anticipates,” and “looks to be” when referring to its Molo deposit as the largest-known graphite deposit in the world.
Energizer’s new-found humility may have resulted from Venture exchange newcomer Mason Graphite [V.LLG]. On October 30 Mason corporate development officer Simon Marcotte told ResourceClips that the company’s upcoming resource estimates for Lac Guéret in Quebec will show “not only the highest grade of graphite in the world but also the biggest deposit by far—no two ways about that—by a very significant margin.”
Just as Energizer released its first graphite resource on Monday, Graphite One Resources [V.GPH] did the same for its Graphite Creek project in Alaska. But Graphite One sounded a bit like the Energizer of old: “Based on the size of the resource, flake content and potential, we believe this to be the largest reported flake graphite deposit in the world,” said Graphite One’s news release.