Mining Company research board

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BCSC settles with former B.C. resident for breaching national mining standard

The former resident is Wally Boguski, who now lives in Arizona. The violations are contained in the enforcement release. He put non-compliant mineral estimates on the Company website.

http://www.bcsc.bc.ca/Enforcement/Settlements/PDF/2017_BCSECCOM_231/

1. Boguski was a British Columbia (BC) resident between 2011and 2014, but currently resides in Arizona. He has been involved with public companies in various capacities for approximately 23 years.

2. Victory Resources Corporation (Victory) is a publicly traded junior mineral exploration company whose shares trade on the TSX Venture Exchange (TSX-V). Victory is engaged in the exploration of mineral properties located in Canada and, until recently, Mexico.

3. Sierra Iron Ore Corporation (Sierra) was a publicly traded junior mineral exploration company whose shares traded on the TSX-V and were quoted on the US Over-the-Counter Markets. In July 2016, Sierra changed its name to Crystal Lake Mining Corporation (Crystal Lake).

4. During the relevant time (2011 to 2014), Boguski was the President, Chief Executive Officer and a director of Victory, and the President, Chief Executive Officer and a director of Sierra. At present, Boguski is no longer the President, Chief Executive Officer or a director of Victory, but he remains the President, Chief Executive Officer and a director of Crystal Lake.

5. Boguski was responsible for the disclosure of mineral resource information for Victory and Sierra between 2011 and 2014. He authorized Victory and Sierra to disclose mineral resource information that was not supported by appropriate scientific or technical evidence, which constituted breaches of sections 2.2(a), 2.4, 3.3(1)(b), 3.3(2)(c), and 4.2(1)(j) of National Instrument 43-101, Standards of Disclosure for Mineral Projects (NI 43-101).

Misconduct

Victory
6. In November 2011, Boguski caused Victory to post on its website an article by Resource World Magazine (Article). The Article, which remained on the website until August 2012, improperly adopted historical reserves and estimates based on the technical report for Victory’s Reforma mining property.

7. The Reforma technical report was not compliant with NI 43-101. The Article posted on the Victory website also constituted disclosure by Victory that was not compliant with NI 43-101.

8. In March of 2014, the Executive Director imposed a Cease Trade Order on Victory. In April of 2014, Victory issued a compliant technical report and a clarifying news release. In June of 2014, the Commission revoked the Cease Trade Order against Victory.

9. Victory’s disclosures described in paragraphs 6 and 7 contravened:

(a) section 2.2(a) of NI 43-101 because the historical reserves were not “mineral reserves” as defined in the Canadian Institute of Mining, Metallurgy and Petroleum definition standards;
(b) section 2.4 of NI 43-101 by failing to include all of the detailed information and commentary required for historical estimates; and
(c) section 4.2(1)(j) of NI 43-101 because Victory failed to file the required technical report 45 days following the release of the historical estimates.

10. Boguski caused Victory to issue several news releases in 2012 and 2013 that described its various exploration activities (Victory News Releases). The Victory News Releases included underground sampling results that were incomplete and other statements that were not supported by the Reforma technical report.

11. The Victory News Releases contravened sections 3.3(1)(b), and 3.3(2)(c) of NI 43-101 because they did not provide adequate interpretation of the exploration information, and failed to reference the required widths in the results.

Sierra
10. In the fall of 2012 and spring of 2013, Boguski caused Sierra to issue five news releases that disclosed results from a 6-hole drill program at its El Creston property (Sierra New Releases).

11. In August 2013, Boguski caused Sierra to post to its website a presentation (Presentation) that referenced potential production rates for the El Creston property that did not comply with the disclosure requirements under s. 2.2(a) of NI 43-101.

12. The Sierra News Releases and the Presentation contained non-compliant and inconsistent disclosure of drilling results, and triggered the requirement to file a new technical report for the El Creston property. Sierra’s disclosure deficiencies constituted breaches of sections 2.2(a) and 4.2(1)(j) of NI 43-101.

13. Sierra issued a news release in March of 2014 clarifying and retracting the non-compliant disclosures.

He was fined, is barred from serving as an officer or director for a year, and may be required to complete an educational course on correct mineral disclosure requirements.

http://www.bcsc.bc.ca/News/News_Releases/2017/61_BCSC_settles_with_former_B_C__resident_for_breaching_national_mining_standard/