RE: RE: Did management know?
Let me just first state that I believe Canaco didn’t mislead investors with purely promotional, hyped-up news releases; the December 2010 news releases truly did contain spectacular results, constituting Canaco’s best intercepts in Magambazi. This is why BCSC is all over them for their insider activity that took place before those news releases. Refer to page 3 of this document to review how Canaco will refute their allegations:
https://www.canaco.ca/i/pdf/CanacoResourcesLetterBCSC-April-20-2012.pdf. The significance of those drill intercepts
https://www.proactiveinvestors.com/companies/news/10609/canaco-resources-intersects-486m-at-1481gt-gold-at-magambazi-in-tanzania-10609.html to the average grading of our initial resource estimate is probably quite large, making it all the more crucial for management--hell-bent on defending their innocence--to downplay those intercepts’ apparent significance to the overall resource. Hence my conjecture there is engineering. Canaco hasn’t witheld any results. That is a misinterpretation of what I am saying. Their accessible intercepts have indeed been published. What I am saying, is that as of the May 9 news release, we know for certain that Canaco drilled at least a minimum of 432 holes (ie, MGZD432).We know the IR estimate included only 397 holes, however, at 102,600 metres. According to that May 9 news release (
https://news.canaco.ca/press-releases/canaco-completes-magambazi-delineation-drill-progr-tsx-venture-can-201205090788872001) , “All drill results
related to the upcoming initial mineral resource estimate have now been released. The initial mineral resource estimate in on track for completion by May 15, 2012, and will include approximately 400 holes totalling 100,000 metres.” At the bottom of the May 9 intercept highlights graph, subnote 2 states, “Not all drill holes identified in this release have had a full sample submission completed as planned. Additional results will be released and posted as received.” In my mind this confirms that not all available data is yet known, nor was necessarily included in the IR estimate. The implications of this are: 1) the INITIAL (called “initial” for a reason) resource estimate is not all-inclusive, and thus 2) the resource estimate can and will be updated in the future. If a minimum of 432 holes were drilled, but only 397 holes constituted the IR estimate, not only does this mean there could be outstanding samples, but it also implies (to me) that there could be a process of selection involved in choosing the samples to draw up a resource estimate. Just because there are intercepts does not necessarily mean they are expeditiously included in a resource estimate, regardless of their calibre.Take this Montero news release for example:
https://newsroom.monteromining.com/press-releases/montero-infill-drilling-returns-14-51-treo-over-3-tsx-venture-mon-201201260761374001 . Their reported intercepts were not included in their resource estimate, but would be used to later update that estimate, just as any of Canaco’s intercepts may be used to later update their own resource estimate. Consider also the last 117 holes drilled by Canaco that returned very little, if nothing; a huge miss. Their possible incorporation into the resource estimate--thanks to the law of averaging--would bring our numbers down, even if our resource estimate WEREN’T excluding any significant, outstanding samples, correct? Who’d be able to prove that those holes weren’t intentionally drilled to achieve just that--to bring our numbers down, so as to diminish both the real AND perceived material significance of the December 2010 infill drilling results in question by the BCSC? Canaco certainly has known the BCSC was after them since November 2011. How many times did they delay the IR estimate? And why? I think it can’t be ruled out that Canaco may have been engineering the estimate to read a certain way. Perhaps that is a “delusional” assessment, but I have heard of stranger things happen with far less at stake. There is more than meets the eye, here. However, anybody who says they were misled to believe Canaco had significant amounts of gold, just take a look at (and interact with) this graph on Corebox:
https://www.corebox.net/properties/magambazi/main-zone?tool=5. A majority of those hits are greater than 1.48 g/t. And see that highest intercept mark? That’s 80.9 g/t at 8.4 metres. Canaco has gold, rest assured. All of the analysts have known it too, for good reason, right up until May 15. So, something smells funny. Brent Cook smelled it. Hell, perhaps he saw first-hand that they seemed to be drilling in a precarious zone when he flew out there and caught some rather foreboding insights. I guess we’ll have some pieces to our puzzle next week. But as I’ve alluded to before, with the rainy season ending, and a previously announced 200,000 metre drill plan still not completed to date, I’m not convinced this thing is done growing.
Of course none of this conjecture has any bearing on the consequences of the BCSC hearing--or on any expanded hearing, for that matter. And I’m not suggesting Canaco will get off the hook, or that the share price recovers any time soon. Just trying to explore some angles in the meantime.
Cheers,
Specul8er