Core GoldThere is a very interesting story happening right now with Core Gold. Recently Core Board of Directors (BOD) brought forth and unanimously supported a takeover offer by another company. But it turns out that the other company is just a shell, and what has happened is that the Core BOD have gone rogue and are attempting to steal their own company. Ok details. This truly could become the mining story of the year, making the Detour Gold story look like a friendly squabble at the yearly family picnic.
Core Gold is a small gold producer , Vancouver based, that operates a mine and mill in Ecuador. For many years it operated as Dynasty Mining and Minerals and struggled to make ends meet, typical story I guess. Part of the problem was that in 2008 the Ecuador government placed a moratorium on new mining after years of abuses by many. This kept Dynasty from utilizing it's many properties, and they could only mine from one underground mine, processing the ore at it's nearby mill. For a long time Dynasty was the only organized gold producer in Ecuador. But by 2015 Dynasty was having problems paying the bills, the mine was flooding, and when the workers went on strike, they were forced to shut down. Bankruptcy was imminent. The CEO, major shareholder, and Chairman , a Mr. Robert Washer didn't give up easily knowing that to do so would wipe out the shareholders that had stuck with the company over the years. In early 2016 a Mr. Keith Piggott stepped forward , and with a few million dollars in hand made a deal to rescue the company. He was named CEO and set about righting the ship. It was a slow go at the start, as there was much debt, and the government had placed the company in receivership over unpaid taxes etc. ; but Ecuador had begun to relax the moratorium on mining and so they were able to start mining another property that had excellent resources and start chipping away at the debt. In the meantime , the CEO ,Mr. Piggott, was working with the local communities to gain back their trust, and established good rapport with the Ecuadorian Government , even meeting with the President at one time. And Mr. Piggott also gained a great deal of trust and respect from long term and new shareholders for his tireless work. He was very hands on, living with his family on site, dealing with day to day problems. Most shareholders also credited him with saving the company and their investments. As part of the restructuring in 2016, a Mr. Greg Sedun was also brought into the company, for very little money, at that time any money was welcome, and he managed to get on the board of directors. And immediately he worked to get Mr. Washer removed from the board and the Chairmanship, and assumed the Chairmanship himself. He is our number one villain in this story.
By the middle of last year, 2018, things were looking up for Core. The debt was paid down sufficiently to get the receivership lifted; a Mr. Javier Reyes who was on the BOD, who owned significant number of shares, and who was a Mexican based banker, had promised $15 million in financing which would have allowed Core to triple the mill capacity , drill some of its' many properties, and generally put it on sound footing; drill results and trench sampling came back from its' Linderos property that were encouraging; the site they were mining from looked better all the time; there was much talk of various joint ventures: and they received long awaited permission to do some exploration drilling at another property: Copper Duke. Copper Duke had been looked at by Ian Tefler way back in 2007 and at that time a deal was proposed that valued Copper Duke at $51 million, at a time when gold was $800/oz. When the government placed the moratorium on new mining the deal was shelved. Now Core wanted to drill a few holes first before deciding how to proceed. If those initial drill holes showed up what many thought they would , than the Core Gold story would have totally changed.
But then nothing happened. And it is now apparent that Core's own BOD was working against the company to starve it of cash. And the reason they were doing this is so that they could attempt to take over Core , in conjunction with others, by orchestrating a merger with a fake Australian company. So first I guess you need to know who this BOD are:
Gregg Sedun Lead Director Gregg is a washed up venture capitalist guy. In the 1990s he was very lucky and invested early in Diamond Fields, the Friedland and Boulle company that was the initial company in the Voisey Bay discovery. Sedun played a minor roll but the project was so big that even a minor roll was big. And it made his career. But then after following Boulle to a couple other projects that worked out, he went on his own and was involved in a string of failures, with no wins. At present his only directorship is with Core. He runs Global Vision Capital in Vancouver which advertises for clients on the internet.
Leonard Clough Director He owns Toro Pacific Management which seems to operate parking lots in Vancouver, and is involved with Terastream Broadband which I couldn't find much about. He owns no shares in Core Gold.
Mark Bailey Director Owns a very few shares of Core, has been director for a long time, and now is the CEO. Based in Vancouver
Javier Reyes Director Owns or controls a considerable number of shares. He is a Mexico City based ,to put it simply, banker. He had promised to provide financing to Core once the receivership was lifted.
Keith Piggott Director and former CEO Well respected in the mining community for his work on many mining projects over the years.
So when something did happen in early 2019, it was a takeover offer by an Australian headquartered company that operated, well actually they hadn't operated anything since 2015, but had operated some toll mills in Brazil and Peru since 2006, losing in grand total one hundred million dollars of investors money, doing so. The company has the name Titan Minerals, listed only on the ASX, the Aussie exchange. Now it is not really Titan that is attempting the takeover , but some moneyed interests (Paul Matyseks' name has been mentioned) that are using Titan as a vehicle for the takeover, with the help of Core's BOD. Titan is an interesting story, and I have written about it on the Stockhouse forum for Core , in the past, if you are interested. Basically the company is worthless. It's only asset worth mentioning is a toll mill in Peru that supposedly (everything about Titan is supposedly) could process 150 tpd if they can find enough artisanal miners to deliver that much to them. Toll mills generally get 5 to 10% of the gold from the material they process so in the best case scenario , with high grade material being supplied, they could net one million a quarter with gold at $1300. In 2018 they spent this much on office and admin. when they weren't doing anything. But all the shares in Titan are held by 'insiders' ,folks in on the deal, so they hold the share price up to give them a ridiculous market cap of $60 million and that market cap is used as the basis of the takeover offer.
Normally such a fictional based offer would never surface but the Core BOD have brought this one forward and are fighting hard to have it happen. It is obvious to most that it is a crooked deal, that the BOD are in league with who ever is backing this deal, because they are being offered a big enough reward to make it worth their while.
I don't want to make this too long and lose your interest, but what has happened now is it seems that Mr. Piggott only went along with the offer to begin with so that he wouldn't be fired immediately . And what he did in his position as CEO is find a very, very superior offer for financing and developing the company. When he did that the BOD immediately fired him. And when Mr. Piggott presented publicly the details of the far superior offer, the BOD very publicly released a statement in which they personally attacked the integrity of Mr. Piggott. Anyone every hear of something like that? A BOD publicly attacking in very personal ways a former much respected CEO? And this from a BOD that individually don't seem to have much status, respect , or anything else. Javier Reyes would be the exception to that, and what he is doing here is a bit of a mystery. It is hard to figure why he would risk his reputation as an honest broker over this. Obviously he has been offered to be made whole, but at what expense to his reputation , career etc.
Anyway, it is possible for you to find much more about this on Stockhouse Core. The shareholders of course are very angry. It is not clear how many shares this group attempting the steal have, and so if it goes to a vote the outcome isn't obvious at this time. This story isn't going away real soon, but the vote is coming up.
There is a great deal of money at stake here. And I somewhat fear for Mr. Piggotts safety. I hope he is taking precautions. We don't know the lengths the money behind this would go to. And I also hope that the shareholders, who could lose everything, also keep fighting this non violently. Voting down this merger, and then voting out this BOD, restoring Mr. Piggott to CEO , is the best outcome. When people think they are going to lose a great deal of their money they first get scared. When they realize that that loss could happen because greedy people are trying to steal it, they get angry. There is a great deal of anger right now. I sincerely hope this doesn't ended badly , but it very much could.