The Ontario Securities Commission has announced a settlement agreement with Bernard Boily, a former exploration manager with Bear Lake Gold Ltd. (TSX: V.BLG, Stock Forum).
The Blainville, Que., resident faces a permanent ban from acting as an officer or director of any reporting issuer in Ontario. He has also agreed to pay an administrative penalty of $750,000, plus $50,000 in costs.
Boily was the qualified person responsible for the contents of Bear Lake’s exploration results from the Larder Lake area of northeastern Ontario.
His case stems back to July 21, 2009 when Bear Lake announced that it has become aware of “material inconsistencies” regarding its exploration results for the Larder Lake project.
The company further noted that the discrepancies appeared “serious” and could result in “significant reductions of gold values for some of the previously announced drilling intercepts.’
Earlier, on July 17, 2009, Bear Lake shares were halted on the basis of pending news from the company.
On July 24, 2009, Bear Lake withdrew all of its previously announced results for the Larder Lake project and advised investors that the results should not be relied upon.
When trading in the shares resumed on July 28, 2009, investors dumped their shares, sending the price down 66% from the previous close of 71 cents on July 17, 2009 reflecting a loss of market cap of over $42 million.
When the stock last traded on March 28, 2013, it closed at 1.5 cents, leaving the company with a market cap of $2 million, based on 136.4 million shares outstanding.
On November 3, 2009, Bear Lake said an investigation by Roscoe Postle Associates Inc. confirmed that exploration data for the Larder Lake project had been compromised. It went on to say that Roscoe had identified discrepancies related to approximately 140 assays within Bear Lake’s assay database.
Of the 58 drill hole intercepts disclosed in press releases, Roscoe concluded that 24 of the intercepts (41%) were affected by unsupported assays. According to Roscoe, after using verified data, it was determined that only seven of the 24 affected intercepts retained a significant intercept.
As the companies “qualified person,” Boily prepared draft press releases for Bear Lake, which contained incorrect and inflated data, according to the settlement agreement.
He thereby engaged in conduct that he reasonably ought to have known resulted in or contributed to an artificial price for Bear Lake Gold securities, the settlement notes.
Under the settlement agreement, Boily is prohibited permanently from becoming or acting as a director or officer of any reporting issuer in Ontario. He must immediately resign any position he holds as a director of officer of any reporting issuer.
He is also subject to the fines and penalties noted above.