with minor fine for a mining fraud. What a joke this is.
Barkerville ex-QP George reprimanded by APEGBC
2016-01-14 10:29 ET - Street Wire
See Street Wire (C-BGM) Barkerville Gold Mines Ltd
by Mike Caswell
The Association of Professional Engineers and Geoscientists of British Columbia has reminded the markets that it has a disciplinary process, handing out fines to a pair of geologists. Those sanctioned include former Barkerville Gold Mines Ltd. qualified person Peter George. He wrote the 2012 report that pegged the company's Cow Mountain project at a massive 10.6 million ounces of gold indicated. The company later had to reduce that estimate to 1.04 million ounces under regulatory scrutiny.
The sanctions were announced by the APEGBC on Tuesday, Jan. 12. In the case of Mr. George, he has received a reprimand and has agreed that he will not prepare any mineral resource or mineral reserve estimates on his own. He also must pay a $15,000 fine and $20,000 in costs. Mr. George accepted the penalties without contesting the matter.
The reprimand for Mr. George comes over three years after the problems at Barkerville first surfaced. On June 28, 2012, the company issued a news release reporting that its flagship Cow Mountain property had 10.62 million ounces of gold indicated, plus as many as 65 million to 90 million ounces in the same trend. If the figures had been correct, the discovery would have been one of the largest gold finds in mining history. News of the estimate sent the stock to $1.60. It had been trading between 45 and 80 cents in the weeks prior.
Unfortunately for shareholders, the estimate also attracted the attention of the B.C. Securities Commission, which issued a cease trade order for Barkerville and required the company to restate the estimate. On June 18, 2013, Barkerville published revised figures, in the process substantially reducing the size of the resource. The company said that its indicated resource was 1.04 million ounces, about one-10th of the original figure. It also cut the potential size of exploration targets in the area to between nine million and 27 million ounces.
Mr. George, in agreeing to the APEGBC sanctions, has admitted that he was negligent in preparing the report for Barkerville. In a consent order dated Dec. 3, 2015, he has agreed that he demonstrated "unprofessional conduct, incompetence or negligence" in his work. Among other things his report did not adequately model the company's resource, the order states.
The specific failings mentioned in the order include the problem that the report did not appear to be based on any independently verified data. Instead it was based on undocumented or incomplete information that others provided. The report also made "inappropriate or insufficiently supported speculation" regarding potential mineralization. Other faults were more technical in nature, such as failing to use cut-off grades in the proper way.
The order further cites Mr. George for technical reports he wrote on Jan. 11, 2011, and April 11, 2011, for Rubicon Minerals Corp.'s Phoenix gold project in Ontario. Those reports fell below acceptable standards and contained inappropriate or insufficiently supported speculation. (Earlier this week Rubicon cut its inferred resource on the Phoenix gold project to 300,000 ounces, down from the 2.2 million it had estimated in 2013. In making the reduction, the company did not mention Mr. George's 2011 estimate, which listed the project at 3.05 million ounces inferred.)
The penalties for Mr. George come just three months after Barkerville's former chief executive officer, Frank Callaghan, received sanctions from the B.C. Securities Commission for the same Cow Mountain resource estimate. The BCSC said that he published the initial estimate and kept repeating it even after the company had retracted it. Mr. Callaghan accepted a $30,000 fine and a one-year officer and director ban to settle the BCSC's case.
Although the APEGBC rarely fines geologists, it also announced penalties for another geologist on Tuesday. It suspended Ian Foreman, who was the qualified person for Golden Sun Mining Corp. According to APEGBC, he failed to prevent the company from misrepresenting a mine in California as being in commercial production. He was also a director of the company at the time. He received a two-year suspension from practising and was ordered to pay $80,000 in costs.
The fines for Mr. George and Mr. Foreman represent the first sanctions the APEGBC has announced against a geologist since November, 2014.
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