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Yeah, expecting a bunch of new ones to crop up. CGLD is the latest.....take a bunch of unpatented claims on USFS land, tell investors you have "billions in mineral reserves" without a single drill hole, and promise no selling of shares by management for two years!!! Of course, that doesn't mean that toxic lenders won't be dumping millions of shares....they're not management, right?
I expect to see the usual tales of reprocessing tailings where the old timer miners somehow missed half the precious metals. New technology involving plasma heated to the temperature of the sun, or maybe some kind of magic elixir to suck out the gold.
Maybe some wacko schemes to extract gold from volcanic ash, or coal ash, or maybe from lake bed clays?
Or maybe another imaginary Mexican gold mine being operated by imaginary management (a la SRGE, CRGP, and now AABB).
Or how about yet another new Lumb scam? It's about time to kickoff another one of those.
With the rising price of Gold and other metals, the number of stock scams tied to mining is also rising.
I think this board is about to get much busier.
Carnies sure love that "WW II halted the bonanza mother lode score" BS line....
Diamonds in Arizona! This is from earlier this year:
Allegations of another fake gold mine. This time, it is backing a popular crypto-currency, one whose issuer has already been labeled by regulators as a "pyramid scheme".
‘Gold-Backed’ Crypto Token’s Promoter Investigated by Florida Regulators
https://www.coindesk.com/gold-backed-crypto-tokens-promoter-investigated-by-florida-regulators
Florida regulators are investigating Karatbars, a German company that’s been promoting a token tied to a Miami “crypto bank” without any banking license in the state.
Karatbars previously issued a cryptocurrency purportedly backed by gold, but CoinDesk has been unable to verify the existence of the mine the company says produced the gold.
Before it entered the crypto space, Karatbars sold gold products online through an affiliate marketing system that regulators in three countries warned the public to avoid.
CoinDesk interviewed three of Karatbars’ current “affiliates,” who said they passionately believe in the company and its tokens.
A German company that claimed to raise $100 million in a 2018 initial coin offering (ICO) is being investigated by Florida financial regulators, CoinDesk has learned.
Karatbars International GmbH has announced plans to follow its first token sale with another one in December 2019. While the 2018 token sale was for its allegedly gold-backed KaratGold Coin (KBC), this year the company has been promoting a KaratBank Coin connected to a “cryptocurrency bank” in Miami.
The claim about a cryptocurrency bank seems to have landed the firm in hot water with the Florida Office of Financial Regulation (OFR).
“Karatbars is not licensed as a bank with the OFR,” the agency’s director of communications, Katie Norris, told CoinDesk. “The OFR has an open investigation, and so that is all the information I can share at this time.”
Karatbars International GmbH has not responded to CoinDesk’s requests for comment. We will update the article if we hear back.
The Florida investigation is not the first time Karatbars has come under regulatory scrutiny. The company was founded in 2011 by German entrepreneur Harald Seiz, who still heads it.
In 2014, long before Karatbars’ first token sale, Quebec’s Financial Markets Regulator issued a warning for investors to “be cautious” about the company, which offered internet-based purchases of gold to prospective “affiliates.” Karatbars offered these buyers a commission to sign up other affiliates.
Regulators in the Netherlands and Namibia have issued similar public warnings, with the former calling Karatbars’ business a form of multi-level marketing and the latter going so far as to label it a pyramid scheme.
First token
Despite this history, Karatbars’ first token, KBC, trades on more than 30 exchanges including HitBTC and Yobit and has been promoted on Twitter by the likes of John McAfee.
The coin, which runs on the ethereum blockchain, was distributed through an ICO in April 2018, reportedly garnering $100 million. Since the summer of 2018, the token has traded at fractions of a penny, according to CoinMarketCap, which calculates KBC’s current global market capitalization at $92,642,798.
The affiliate marketing strategy of Karatbars’ earlier business carried over to the token issuance, and affiliates interviewed by CoinDesk said much of their buying activity took place on the company’s own platform. Perhaps for this reason, the coins tend to stay put on the public ledger. According to the blockchain data explorer site Etherscan, the first transfer of KBC took place in November 2018, months after the ICO, with 20.9 million tokens now residing in 42 wallets.
Karatbars claims that the gold backing KBC was mined from Fort Dauphin in Madagascar. But CoinDesk was unable to independently verify that such a mine exists, or that Karatbars has any in the country.
In an email forwarded to CoinDesk by a third-party researcher, officials at the Madagascar Chamber of Mines said:
“We regret to inform you that there is no Fort Dauphin gold mine in Madagascar and Karatbars does not hold a mining permit in Madagascar.”
CoinDesk has reached out directly to the relevant authorities in Madagascar and will update the article if we receive more clarity on the matter.
When asked about his posts promoting the company, McAfee told CoinDesk:
“I believe that coins linked to a standard of value will be the foundation of the entire crypto movement. A safe haven without having to exit the crypto world into the world of fiat currencies.”
‘I believe in it’
It might be easy to dismiss KBC but many have seen opportunities in the project.
Florida resident Taylor Richey, a long-time gold bug and current KBC affiliate, launched his own startup to facilitate a point-of-sale service for KBC, called Karatstars Labs, after getting laid off from his factory job. So far, Richey said, two merchants (one being his own online store, however) have agreed to accept the tokens as payment for their wares.
“I believe in it enough that I decided to make my own career, a company, building a company to bring value to this ecosystem,” Richey said. “In 2018, when they [Karatbars] pivoted from a gold company into crypto, with the help of their affiliate program they became the number one seller of gold bullion in the world.” (Senior executives at three different organizations in the gold bullion market told CoinDesk it would be difficult or impossible to prove such a claim.)
Three KBC-holders interviewed by CoinDesk stated multiple times that Karatbars ran the world’s largest ICO (a title that arguably belongs to Block.One’s $4.1 billion sale for the EOS blockchain), praised the regulated state of the alleged crypto bank in Miami and mentioned purported endorsements from parties as diverse as the Vatican to the Real Madrid soccer team, neither of which responded to requests for comment. However, famed footballer Roberto Carlos did appear on stage at a Karatbars event in Amsterdam.
Likewise, the holders’ belief in this company, they said, was bolstered by real products – swag and small pieces of gold – that affiliates often received as part of their rewards program. Such affiliated products, like an “upcoming” Karatbars-friendly smartphone, are also promoted on sites like CoinTelegraph and VC News Network, a Reuters partner.
One American KBC affiliate, Andrea LaRosa, broke down in tears while telling CoinDesk about how the gold rewards finally offered her financial freedom in late 2018, after years of struggling with an assortment of bootstrapped businesses. After all, she said, the company has shipped her pieces of real gold.
“It’s based on how many contracts that you can collect. How many transactions that are made, in your business,” LaRosa said. “I’ve been inspired and gotten so much encouragement from other leaders. They don’t want anything from here. They’re really here to help. … I love Dr. Seiz’s mission to help people get out of debt.”
(Affiliates and press materials often refer to Karatbars founder Seiz as a doctor. CoinDesk was not able to independently confirm any such credentials.)
Crypto gateways
Many of these token holders, including LaRosa, came to KBC through the bitcoin community and not through traditional gold bug circles like Richley, who told CoinDesk he did enough research to avoid most ICOs.
LaRosa still holds a little bit of bitcoin and ether herself, although she has moved the majority of her investments into KBC.
“Bitcoin is really backed by nothing. But our KBC is backed by gold, and the [KaratBank Coin] is backed by our assets,” she said of her reasoning. “Eventually the two coins will be merged and come together.”
Likewise, Filipino-American immigrant and KBC affiliate Jose Buco plans to travel back to his homeland in the near future to preach the Karatgold gospel. He told CoinDesk he started by investing $32,000 in this company’s crypto products in 2018, assets which he said public metrics and exchanges now deem to be worth $41,000.
He recently returned from the Netherlands, where hundreds of Karatbars affiliates gathered in August to celebrate their “bridge from the financial system to cryptocurrency,” as Buco put it.
Like the other holders interviewed by CoinDesk, Buco researched Karatbars and bitcoin itself before deciding to prioritize KBC. As someone who felt underserved by the traditional financial system, he said his tangible evidence came from social media and community events, including people he built personal relationships with.
“You can see on YouTube the gold they are stocking up,” Buco said.
What kind of "mining" company issues a PR with language like this?
https://www.otcmarkets.com/stock/TINO/news/story?e&id=1440011
Anybody want to learn about the 29 known compounds of gold, 16 of which do not dissolve in aqua regia, and 14 of which cannot be detected in a fire assay?
http://www.centaurustechnologiesinc.com/2/wp-content/uploads/2019/06/2APACHE'S%20PROCESSING%20SYSTEMS%20INFORMATION.pdf
It is amazing that only 15% of gold in "gold mineralized structures" is actually in the metallic form. Mining companies should just start over, they've been doing it all wrong.
Hey Gitreal. Hope all is well. haven't spoken to you since uspr. would you mind sending me a PM with your email. I don't do PM's here. I'd like to ask your advice on something.
SMH....That is definitely one the most obviously fraudulent PR's I have ever seen.
I note that it was issued on the I-Hub Newswire which has no wide public distribution, so the regulators, including the SEC, probably have not seen it. Not yet, anyway.
"Kimberly" dikes in Chloride, Arizona, and diamonds!!! Gold, silver, lead and zinc. Tailings worth $22 billion. Sheez.......
Three of my favorite "mining" companies have stopped filing with the SEC (at least quarterlies and annuals):
Ireland (IRLD) - last filing was 11/14/17, now about 25 months delinquent
El Capitan (ECPN) - last filing was 3/30/18, now about 9 months delinquent
Searchlight (SRCH) - last filing was 11/14/16, now about 37 months delinquent
Given the recent improvement by the SEC in suspensions due to delinquencies, Ireland and Searchlight are on the chopping block. El Capitan has a while to go.
FYI, Ireland has claimed to have discovered a huge gold deposit in a dry lake bed, one of the last places geologically you would expect gold to be. El Capitan has found a huge platinum/gold/silver deposit in New Mexico, a state where little platinum has ever been found. Searchlight has been promoting a 20 million ton pile of smelter slag where Phelps Dodge inexplicably left behind 10 millions ounces of gold because "they were only interested in the copper".
Come check it out. The shit show is under a hell of a promotional push.
Got some who's who working the marks over.
Sounds fishy.....kinda like the latest scam, DSCR.
Quite a few defensive pumpers on that board...sayin "where's the pump" and repeating the fluff from the company. which seems to be hawking the same old Idaho mine that SFMI pushed--until it was busted and is about to be revoked.
Without digging any further, owning an "artisan" mining concession in some far off land sounds hokey as hell. And selling precious metals in Asian markets? Why do "Asian markets" need a crappy OTC pinksheet to buy precious metals from?
That is what I am assuming. The "disclosure" is very selective.
Asia Broadband is a funny name for a mining company. Will look into this further. I see from the "filing" that they have a lot of cash on hand. That's unusual - I assume it is not real.
What do you guys know about this too good to be true pink sheet mining special AABB?
https://backend.otcmarkets.com/otcapi/company/financial-report/206644/content
SEC Adopts Rules to Modernize Property Disclosures Required for Mining Registrants
This new guidance officially replaces Industry Guide 7, which will remain effective until the new guidance is fully phased-in after January 1, 2021.
http://www.sec.gov/news/press-release/2018-248
Washington D.C., Oct. 31, 2018 —
The Securities and Exchange Commission today announced that it has voted to adopt amendments to modernize the property disclosure requirements for mining registrants, and related guidance, under the Securities Act of 1933 and the Securities Exchange Act of 1934. The amendments will provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions. The amendments also will more closely align the Commission’s disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards.
Under the final rules, a registrant with material mining operations must disclose specified information in its Securities Act and Exchange Act filings concerning its mineral resources, in addition to its mineral reserves. Current Commission rules and guidance permit the disclosure of non-reserve estimates only in limited circumstances. Requiring the disclosure of mineral resources in addition to mineral reserves will provide investors with important information concerning the registrant’s operations and prospects.
“The final rules will modernize the Commission’s mining property disclosure regime by improving the quality and reliability of information provided to investors and by harmonizing disclosures with international standards, including removing the restriction on disclosure of mineral resource estimates that may have placed U.S. registrants and investors at a disadvantage,” said SEC Chairman Jay Clayton. “We appreciate the valuable input that we have received from a diverse group of interested parties that helped inform the Commission and shape the final rules.”
The final rules include several other requirements designed to further the protection and understanding of investors. The final rules also reflect a number of changes to the rules proposed in June 2016 in response to commenters.
The final rules provide a two-year transition period so that a registrant will not be required to begin to comply with the new rules until its first fiscal year beginning on or after Jan. 1, 2021.
* * *
FACT SHEET
Modernization of Property Disclosures for Mining Registrants
Action
The Commission has adopted amendments to modernize the property disclosure requirements for mining registrants, and related guidance, under the Securities Act of 1933 and the Securities Exchange Act of 1934. The amendments more closely align the Commission’s disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards. In addition, the amendments rescind Industry Guide 7 and consolidate the disclosure requirements for registrants with material mining operations in a new subpart of Regulation S-K.
These amendments are intended to provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions.
Highlights of the Final Rules
Under the final rule amendments, as proposed and consistent with global standards as embodied by the Committee for Reserves International Reporting Standards (“CRIRSCO”), a registrant with material mining operations must disclose specified information in its Securities Act and Exchange Act filings concerning mineral resources that have been determined on one or more of its properties. Current Commission rules and guidance permit the disclosure of non-reserve estimates, such as mineral resources, only in limited circumstances. Requiring the disclosure of mineral resources in addition to mineral reserves will provide investors with important information concerning the registrant’s operations and prospects.
Also as proposed, and consistent with the CRIRSCO standards, the final rule amendments require a registrant’s disclosure of exploration results, mineral resources, or mineral reserves in Commission filings to be based on and accurately reflect information and supporting documentation prepared by a mining expert--the “qualified person.” This requirement will further the protection of investors by helping to foster proper risk assessment and disclosure, which is key to an investor’s understanding of each stage of a mining project.
As proposed, the final rule amendments require a registrant to obtain a dated and signed technical report summary from the qualified person or persons, which identifies and summarizes the information reviewed and conclusions reached by each qualified person about the registrant’s mineral resources or mineral reserves determined to be on each material property. A registrant must file the technical report summary as an exhibit to the relevant Commission filing when disclosing mineral reserves or mineral resources for the first time or when there is a material change in the mineral reserves or mineral resources from the last technical report summary filed for the property. The technical report summary filing requirement will not only help ensure that the registrant’s disclosure in the Commission filing is accurate and reliable, but also will enhance investor understanding of a registrant’s material mining properties.
Principal Changes from the Proposed Rules
The final rule amendments include a number of changes to the proposed rules in response to commenters. These changes would more closely align the Commission’s mining property disclosure requirements with the CRIRSCO standards and thereby help decrease, relative to the proposed rules, the compliance burden and costs for the many registrants that are subject to one or more of the CRIRSCO-based codes, while preserving important investor protections. For example, among the changes, the final rules:
Require a qualified person to use a price for each commodity that provides a reasonable basis for establishing estimates of mineral resources or mineral reserves, which may be a historical or forward-looking price, as long as the qualified person discloses and explains his or her reasons for using the selected price, including the material assumptions underlying the selection
Provide that a qualified person will not be subject to expert liability under Section 11 of the Securities Act for certain aspects of specified modifying factors outside the expertise of the qualified person that are based on information provided by the registrant and are discussed in the technical report summary or other parts of the registration statement
Eliminate the proposed quantitative presumptions regarding when a registrant’s mining operations, and when a change in previously reported estimates of mineral resources or mineral reserves, are deemed to be material
Eliminate the proposed summary disclosure provision requiring specific items of information in tabular format about a registrant’s top 20 properties and, instead, adopt a more principles-based approach by requiring the registrant to provide investors with an overview of its properties and mining operations
Reduce the number of summary and individual property disclosure provisions requiring tables from seven, as proposed, to two, and permit other required disclosure to be in either narrative or tabular format
Permit, but not require, a registrant to file a technical report summary to support its disclosure of exploration results
Permit the disclosure of exploration targets in Commission filings if accompanied by certain specified cautionary and explanatory statements
Permit a qualified person to determine mineral resources and reserves at any specific point of reference, which must be disclosed in the technical report summary, rather than at three points of reference
Permit a qualified person to include inferred resources in an economic analysis that the qualified person opts to include in an initial assessment as long as certain conditions are met
Define “mineral reserve” to include diluting materials and allowances for losses that may occur when the material is mined or extracted
Permit a qualified person to conduct either a pre-feasibility or final feasibility study to support a determination of mineral reserves even in high risk situations
Permit the use of historical estimates of mineral resources or reserves in Commission filings pertaining to mergers, acquisitions, or business combinations if the registrant is unable to update the estimate prior to the completion of the relevant transaction, provided that the registrant discloses the source and date of the estimate, and does not treat the estimate as a current estimate
Permit a registrant holding a royalty or similar interest to omit any information required under the summary and individual property disclosure provisions to which it lacks access and which it cannot obtain without incurring an unreasonable burden or expense.
The final rules also clarify that a third-party firm, which employs a qualified person, may sign the technical report summary and provide the written consent required for an expert under the Securities Act.
Compliance Date
The Commission adopted a two-year transition period so that a registrant will not begin to comply with the new rules until its first fiscal year beginning on or after Jan. 1, 2021. A registrant may voluntarily comply with the new rules prior to the compliance date, subject to the Commission’s completion of necessary EDGAR reprogramming changes. Guide 7 would remain effective until all registrants are required to comply with the final rules, at which time Guide 7 would be rescinded.
You nailed it years ago.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=119810510
And, of course, bogus claims of having a "NI 43-101 Report" were also involved. Seems like a recurring theme, doesn't it? All the best American mining scams do it, and it is another massive red flag.
I was wondering about Wita also. He seems to be waist deep in more than one penny stock scheme.
Here is the SEC complaint:
http://www.sec.gov/litigation/complaints/2018/comp24241.pdf
It contains more details about the scam, but is quite light on the details of their fraudulent statements about the worthless placer claims they told investors had a "minimum gross value of $273 million". I wonder why Craig Wiita was not charged for this fraud along with Marshall and Naylor?
If any company places a dollar value on in-ground resources, it is a fraud. 100% guaranteed.
Another Arizona placer scam (ITEC) bites the dust.
SEC Charges Nevada Microcap Issuer and Individuals with Unregistered, Fraudulent Offering
Litigation Release No. 24241 / August 21, 2018
Securities and Exchange Commission v. Intertech Solutions, Inc., William Scott Marshall, David Michael Naylor, and West Port Energy LLC, No. 2:18-cv-01566 (D. Nev. filed Aug. 20, 2018)
The Securities and Exchange Commission has charged a corporation and its principals with conducting a multi-million dollar offering fraud.
The SEC alleges that Nevada-based microcap issuer Intertech Solutions, Inc., which purports to be a project finance and management company for mining operations, William Scott Marshall, and David Naylor raised over $7 million from hundreds of investors throughout the United States and Canada. According to the SEC, Intertech, Marshall, and Naylor misled investors about the value of Intertech's gold mine interest, Intertech's timeframe for generating revenue, and commission payments Intertech made to securities solicitors. The complaint also alleges that, at Marshall's direction, Intertech hired numerous individuals to engage in cold-call solicitations of investors. Finally, Marshall and Naylor allegedly stole hundreds of thousands of dollars in investor funds, which they used to pay for personal expenses such as such as gym memberships, resort stays, personal medical expenses, and a car Marshall exclusively used.
The SEC's complaint, filed in federal court in Nevada, charges Intertech, Marshall, and Naylor with violations of the securities registration provisions of Sections 5(a) and (c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The complaint also charges Intertech and Marshall with aiding and abetting violations of the broker registration provisions of Section 15(a)(1) of the Exchange Act. Without admitting or denying the SEC's allegations, Intertech, Marshall, Naylor, and relief defendant West Port Energy LLC, a company formed by Marshall and which allegedly received proceeds of the fraud, have agreed to disgorge nearly $7.4 million in proceeds from the alleged fraud, and Marshall and Naylor have agreed to pay civil penalties of $184,767 and $92,383, respectively. Intertech, Marshall, and Naylor have also agreed to permanent injunctions, and Marshall and Naylor have agreed to conduct-based injunctions and permanent officer-and-director and penny-stock bars. The settlement is subject to court approval.
The SEC's investigation was conducted by Laurie Abbott, James Thibodeau, and Kenji Kawa, was assisted by Trial Counsel Amy Oliver, and was supervised by Regional Director Daniel Wadley of the Salt Lake Regional Office.
The SEC's Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.
https://www.sec.gov/litigation/litreleases/2018/lr24241.htm
Great Frauds Require Darkness
By Theodore Butler
May 31st, 2018
No doubt you’re aware of the massive fraud uncovered at Theranos, the high tech medical startup purported to be able to run any number of diagnostic tests from a single drop of blood. Theranos was a Silicon Valley upstart valued at $10 billion at its peak and headed by an attractive young woman modeled after the late Steve Jobs. Theranos’ diagnostic machines didn’t work as advertised and the whole fraud, said to be the largest since Enron, was uncovered by a sharp and determined reporter at the Wall Street Journal. The reporter, John Carreyrou, was
instrumental in the fraud’s demise.
http://nymag.com/daily/intelligencer/2018/05/john-carreyrous-new-book-on-silicon-valley-bad-blood.html
The first rule of great frauds is that the real facts must remain in the dark; while the second rule is for insiders to fight against the facts being brought into the sunlight. These are also the rules that have enabled the COMEX silver manipulation to exist for as long as it has.
Theranos was founded in 2003, so the fraud lasted nearly a decade and a half. The silver fraud has lasted for more than three decades, but then again, this fraud is more sophisticated with vested interests much stronger than the fraud at Theranos. Carreyrou’s first story on Theranos appeared in Oct 2015 and in practically one fell swoop, the real Theranos story was brought into the light. It’s much different with the fraud of the COMEX silver manipulation.
Admittedly, many individual investors have come to learn of the COMEX silver manipulation fraud over the years, but none have learned about it from a main stream media platform like the Wall Street Journal. Word of the COMEX silver fraud has largely been disseminated on the Internet. With Theranos, it came down to the very simple proposition of did their blood testing technology work? The equally simple answer was no. With silver, it’s nowhere near as simple. The ongoing price manipulation is far more complex.
With the COMEX silver fraud, all the leading legitimate participants and regulators have aligned themselves to prolong the fraud. Whereas the Securities and Exchange Commission wasted little time is finding Theranos to be a fraud, the CFTC has denied the COMEX silver fraud every step of the way for 30 years. It has totally clammed up on the matter for the past decade, despite more specific allegations of wrongdoing than ever before. It is the CFTC’s own data that indicate the consistent presence of a concentrated short position (by JPMorgan) over the past ten years in COMEX silver futures that is so dominant and controlling of price that the bank has never once taken a loss when shorting silver, only profits. JPMorgan has used the result of its price suppression – an artificial low price – to acquire the largest position of physical metal in history, some 700 million ounces and counting. That’s nearly seven times the amount of silver bought by the Hunt Brothers in 1980 or Berkshire Hathaway in 1998. Because the CFTC has denied the existence of a COMEX silver manipulation since 1986, it has painted itself into the corner no matter what the evidence may be. For the agency to now admit that silver has been manipulated in price would be tantamount to admitting it obstructed justice for decades. That’s not going to happen.
It’s not just the CFTC that has dug in its heels in ever moving against the COMEX silver manipulation. It’s also the CME Group, which owns and operates the COMEX, where the silver manipulation fraud is carried out. Were the CME to move against the silver manipulation, not only would it be depriving itself of many millions of dollars in trading revenue, it would be opening itself up to endless lawsuits for allowing the fraud to continue. The leading beneficiary of the COMEX silver manipulation, JPMorgan, has made billions of dollars in illicit trading profits since it became the leading short seller in COMEX silver futures on its takeover of Bear Stearns ten years ago and has used its suppression of prices to amass 700 million ounces of actual metal on the cheap. Does anyone think for a moment that JPM would admit to manipulating prices?
At Theranos, a relative handful of inside investors attempted to keep the fraud in the dark. With the COMEX silver fraud, the list of those keeping the real facts in the dark is a mile long. Pitted against the insiders intent on keeping the COMEX silver fraud in the dark are mining companies and silver investors, the vast majority of which don’t have a clue about the fraud. In this group are those who denied the silver manipulation early on and can’t face up to admitting they were wrong even as compelling new data proving fraud roll in. The surest proof of the COMEX silver manipulation fraud is the refusal of the insiders to openly discuss it. The CFTC refuses to answer or refute allegations, like JPMorgan never taking a loss in shorting COMEX silver and the fact that JPM has been the leading short seller while amassing more physical silver than any entity in history. And JPMorgan and the CME Group are so intent on keeping the real facts under wraps that both shrug off public allegations of criminal behavior that would normally bring charges of libel and slander were the allegations not true. Let me be clear, both JPMorgan and the CME Group are stone-cold crooks when it comes to silver.
Ted Butler
http://silverseek.com/commentary/great-frauds-require-darkness-17280
Apple discover new technique with aluminum/bauxite!
Apple on GENERAL NEWS: MORNING EDITION
"APPLE HELPS DISCOVER NEW TECHNIQUE THAT COULD MAKE ALUMINIUM FOR IPHONES AND OTHER PRODUCTS WITHOUT DAMAGING THE ENVIRONMENT"
https://www.independent.co.uk/…/apple-iphone-aluminum-break…
Apple helps discover new technique that could revolutionise the way it makes iPhones Apple has helped find a new way of making aluminium that could revolutionise the way that iPhones and other products are made. The new technique completely…
independent.co.uk
Here you have the opportunity to take advantage on facts and info from QBL. Like the QBL on ASX website chapter, who can provide verified facts; here is regulated on-line stockbrokers suggestion, no games info and a good sum up. Voluntary suspension is requested regarding a significant and strategic acquisition by QBL’s subsidiary Medical Cannabis Limited until next FRIDAY,the first or before. Contact information to the QBL Investor service, who can reply on questions.
https://www.queenslandbauxite.com/ (remember different timezones outside Australia, trade pre-start 7 AM in Sydney, local time, trade opens 10 AM)
A massive, 'semi-infinite' trove of rare-earth metals has been found in Japan
https://www.cnbc.com/2018/04/12/japan-rare-earths-huge-deposit-of-metals-found-in-pacific.html
Researchers have found hundreds of years' worth of rare-earth materials underneath Japanese waters — enough to supply to the world on a "semi-infinite basis," according to a study published in Nature Publishing Group's Scientific Reports.
Rare-earth metals are crucial in the making of high-tech products such as electric vehicles and batteries, and most of the world has relied on China for almost all of its needs.
Researchers have found hundreds of years' worth of critical rare-earth metals beneath Japanese waters — enough to supply to the world on a "semi-infinite basis," according to a study published on Tuesday.
The materials sit in a roughly 965-square-mile Pacific Ocean seabed near Minamitorishima Island, which is located 1,150 miles southeast of Tokyo, according to the study published in Nature Publishing Group's Scientific Reports.
Rare-earth metals are crucial in the making of high-tech products such as electric vehicles, mobile phones and batteries, and the world has relied on China for almost all of its rare-earth material.
The seabed contains more than 16 million tons of rare-earth oxides, according to the study. That's equivalent to 780 years' worth of yttrium supply, 620 years of europium, 420 years of terbium and 730 years of dysprosium, it added.
The discovery "has the potential to supply these metals on a semi-infinite basis to the world," the study said.
Japan started looking after China cut off supplies
The discovery of the deposits could pit Japan against China to become the world's largest producer of the materials, The Wall Street Journal reported Wednesday.
Japan started seeking its own rare-earth metals after China held back shipments in 2010 during a dispute over islands both countries claim, Reuters reported in 2014. As a major electronics manufacturer, Japan needs rare earths for components.
Separately, China held back exports of certain types of rare earths starting 2010, which caused prices to jump by as much as 10 times — further pushing Japan to seek other sources, according to the Journal.
Extracting those metals from the seabed, however, is an expensive affair, the Journal reported. A consortium of Japanese government-backed entities, companies and researchers plans to conduct a feasibility test within the next five years, according to the Journal.
The full report:
https://www.nature.com/articles/s41598-018-23948-5.pdf
Two Mines Supply Half Of U.S. Silver Production & The Real Cost To Produce Silver
By SRSrocco
April 4, 2018
Just two mines supply the United States with half of its silver production, and both are located in Alaska. It’s quite amazing that Alaska now produces half of the silver for the U.S. when only 30 years ago total mine supply from the state was less than 50,000 oz per year. The silver produced in Alaska comes from the Greens Creek and Red Dog Mines. One is a primary silver mine and the other a zinc-lead base metal mine.
Even though Hecla’s Greens Creek Mine is labeled as a primary silver mine, 56% of its revenues come from its gold, zinc, and lead metal sales/strong>. However, Teck Resources, that runs the Red Dog Mine doesn’t even list its silver production in its financial reports. Because Red Dog produces one heck of a lot of zinc and lead, their silver production doesn’t amount to much in the way of revenues.
For example, the Red Dog Mine produced 542,000 metric tons (1.1 billion pounds) of zinc and 110,000 metric tons (222 million pounds) of lead, while its estimated silver production was 6.6 million oz (Moz). According to Teck’s 2017 Annual Report, total revenues from the Red Dog Mine were $1.75 billion. With the estimated silver price of $17 in 2017, total revenues from 6.6 Moz of silver were $112 million, or just 6% of the total.
In addition, Hecla’s Greens Creek Mine in Alaska produced 8.4 Moz of silver this year, down from 9.2 Moz in 2016. As I mentioned, the Greens Creek Mine also generated a lot of gold, zinc, and lead, equaling $182 million of the total revenues of $326 million (including treatment costs).
The USGS just came out with their final Silver Mineral Industry Survey for 2017, reporting that the U.S. produced 33 million oz (Moz), down from 37 Moz the previous year. U.S. silver production declined due to the union strike and the shut down of Hecla’s Lucky Friday Mine.
As we can see, Greens Creek and Red Dog accounted for 15 Moz of the total 33 Moz of U.S. silver production:
While Greens Creek and Red Dog supplied nearly half of U.S. silver production last year, the next two largest mines provided 21% of the total.
Coeur’s Rochester Mine in Nevada produced 4.7 Moz of silver while the Bingham Canyon Mine, the country’s largest copper mine, supplied 2.2 Moz. Almost 7 Moz of silver came from these two mines alone.
Thus, the top four silver producing mines in the United States accounted for two-thirds of the supply… 22 Moz:
Greens Creek, Alaska (8.4 Moz) = Primary Silver Mine
Red Dog, Alaska (6.6 Moz) = Zinc-Lead Base Metal Mine
Rochester Mine, Nevada (4.7 Moz) = Gold-Silver Mine
Bingham Canyon Mine, Utah (2.2 Moz) = Copper Mine
The majority of the remaining 11 Moz of U.S. silver production comes as a by-product of gold and copper mining, predominantly in Nevada and Arizona.
What’s The Real Cost To Produce Primary Silver?
One of the most misunderstood metrics in the mining industry is the real cost to produce primary silver. Now, I am not talking about the cost to produce silver as a by-product of gold or base metal mining. Because 30% of global silver mine supply comes from primary mines, the market determines the silver price based on its cost of primary silver production.
Unfortunately, there are still investors who believe that it only costs $5 an ounce to produce silver. And who can blame them when Hecla comes out and reports that its AISC – All-In Sustaining Cost for its Greens Creek Mine was $5.76. If Hecla’s Greens Creek Mine was profitable at $5.76 an ounce, then why did the company state a $23 million net income loss for the year? Well, part of the reason for the net income loss was due to costs associated with the suspension of its the Lucky Friday Mine as well as losses on derivative contracts.
However, if we factor out some of those costs and look at Hecla’s Cash Flow Statement, the company actually stated $18 million in positive Free Cash Flow:
We arrive at a positive Free Cash Flow by subtracting the Additions of properties, plant, and equipment (CAPEX spending) from the Net cash provided by operating activities ($116 million – $98 million). If we take that $18 million and divide it by the 12.5 Moz of total silver production, then Hecla made about $1.44 of free cash flow per ounce. Hecla’s realized silver price in 2017 was $17.23. So, if we subtract the $1.44 cost per oz from $17.23, then Hecla’s estimated silver breakeven is about $15.80 an ounce.
If Hecla’s estimated breakeven is nearly $16, then how are they posting a $5.76 AISC – All-In Sustaining Cost?? Let’s take a look at the breakdown of their cost structure at their mines:
The reason Hecla can report such a low AISC is by deducting their gold and base metal revenue, which is labeled as “By-product Credits.” The Greens Creek Mine had $182 million in gold, zinc and lead credits. By gosh, it’s no wonder Hecla is reporting such a low AISC because it deducted 56% of its revenues.
By adding up all the by-product credits from the three silver mines, it would equal $228 million. However, if we deduct the treatment costs of $48 million from that total, it turns out to be $180 million. Now, let’s put our THINKING CAPS on for a minute. How would the removal of $180 million from Hecla’s Net Income and Free Cash impact their financials?
Hecla’s Net Income = -$23 million – $180 million = -$203 million
Hecla’s Free Cash Flow = $18 million – 180 million = -$162 million
So, if Hecla actually deducted its by-product metal revenues (credits) from its financials, it would be reporting a $203 net income loss and a negative $162 million in free cash flow. [color=red]Which means, the ASIC is a totally BOGUS metric that should be thrown out the window along with Cash Cost accounting.[color]
While Hecla is labeled as a primary silver mining company, they are first and foremost, a MINING COMPANY. Hecla needs its gold, zinc, and lead metal sales to remain profitable or at least, to keep losses to a minimum. Anyone who uses the AISC -All-In Sustaining Cost as a metric for calculating the cost to produce silver needs to get a job printing money for the Federal Reserve.
Way too many investors fall for this nonsense and do not understand that CASH COSTS and AISC are totally useless in determining the profitability of a company. Another thing I hear all the time from less sophisticated investors is that these mining companies use a lot of WRITE-OFFS, such as Depreciation, Depletion, and Amortization to show higher costs. Investors who believe these mining companies are making up deductions so they can show less profit, don’t understand the accounting industry.
Without getting into too many details, if you look once again at Hecla’s Cash Flow statement, you will see that the Depreciation, Depletion, and Amortization are offset by the additional CAPEX spending:
If we add up the total Depreciation, Depletion, and Amortization (D,D & A) from 2015-2017, it totals $352 million. Thus, unsophisticated investors might think Hecla has made $352 million in profit because they are just writing off D,D & A to show more costs. Well, if we add up the CAPEX spending highlighted in yellow, Hecla spent $400 million on mostly sustaining and replacing production. Which also means, Hecla’s net free cash flow for 2015-2017 was a negative $48 million ($400 – $352).
One more thing. Because Hecla holds $502 million in debt, it is paying a hefty $32 million a year just to service its debt. Now, to put it another way, Hecla paid $2.80 per ounce of silver just to cover their interest expense last year.
By investigating Hecla’s financial statements, and doing some forensic analysis, we can plainly see that primary silver mining companies are not producing silver anywhere near $5 an ounce. If you have read this article and still believe the primary silver mining industry is producing silver at $5 an ounce, then you need to sell all your precious metals and buy Netflix and Amazon stock, hand over fist.
FINAL WORD: About My Gold & Silver Analysis
For some odd reason, I continue to receive emails and comments from individuals who state that the silver and gold prices are not taking off as I forecasted in my articles and videos. So, I thought I would CLARIFY the issue.
PLEASE STOP looking at the markets on a DAY TO DAY BASIS… it will drive you bananas. The trends that I forecasted will take place over the next 1-2 years. As I mentioned in my videos, it took nearly two years for the Dow Jones Index to fall 53% from its high in July 2007 to its low in Feb 2009. Nothing goes down in a straight line… especially BITCOIN and the CRYPTOS.
So, be patient. The fundamentals for STOCKS, BONDS, & REAL ESTATE are just as lousy today as they were in January when the market peaked. Give it some time and don’t sweat the small stuff.
Lastly, individuals who believe the Precious Metals Dealers are the shills and swindlers pushing worthless gold and silver, please get your head examined. I hate to be so blunt, but it does seem like IQ’s have dropped considerably over the past few years. I would kindly like to remind these Fiat Money Einsteins that there is no intrinsic value in paper money unless you want to burn it or use it to wipe one’s bottom.
However, gold and silver can be used in jewelry and industry. If you take your gold jewelry to a pawnshop, you are very likely to receive close to spot, $1,300 an ounce and $16 an ounce for silver. Now, go to Venezuela and see how much the INTRINSIC VALUE is for the Bolivar. At best, the intrinsic value of a Federal Reserve Note is its printing cost. Currently, it cost about $0.14 to produce a $100 bill.
http://www.lemetropolecafe.com/kiki_table.cfm?pid=14378
No rhodium, either? Apaprently, that's all up in Frank Ekejija's 22 Montana claims...All $25 trillion worth....bwa haaa as if....
There's no platinum and palladium laying in the dirt of the Arizons Strip? Shocker.
SEC busts Arizona Mining Scam
https://www.sec.gov/litigation/complaints/2018/comp24064.pdf
Why bother lying about a real property when you can just make one up? Sad they were able to steal $6 million with both a non-existent property AND non-existent processing technique.
"Jersey, Tager, and the solicitors misrepresented to investors and/or omitted to disclose to investors that, among other things, Jersey was owned and operated by a convicted felon (Tager), Jersey had no BLM claim, Jersey’s technology was not commercially viable, Jersey had no material revenues, the value of Jersey’s physical assets was insufficient to secure Jersey investors, Jersey funds were dissipated through personal use by Jersey principals Tager, Mangum, and Freitas, and some Jersey investors were repaid with funds raised from subsequent Jersey investors (i.e., a Ponzi scheme)."
Gold CEO Lashes Out Against His Industry
www.bloomberg.com/news/articles/2017-11-24/myopic-gold-ceos-get-a-tongue-lashing-by-randgold-s-bristow
A gold industry obsessed with containing costs and minimizing risks will find itself at the edge of a cliff by 2020 as supply tightens, according to one of the most profitable producers.
Despite prices recovering from 2015 lows, the industry has been slow to reinvest in exploration or sustaining capital, Randgold Resources Ltd. Chief Executive Officer Mark Bristow said. Half of the gold coming out of the ground isn’t profitable to mine based on the true extraction costs, he said.
“The one thing this industry does very well is mine gold at a loss,” Bristow told analysts at a breakfast meeting in Toronto on Friday.
he weakening outlook is being masked by a focus on all-in-sustaining costs rather than cash costs, he said. While companies can lower AISC and boost earnings by reducing spending to sustain operations or tightening exploration budgets, the tactic erodes asset quality in the long run, the CEO said.
Similarly, severe damage has been done by high-grading, which shortens the life of a mine by focusing on the best quality ore. Since 2007, grades have dropped from an average of 2.5 grams a ton to about 1 gram, Bristow said.
In a wide-ranging chat with analysts, and during an interview afterward, Bristow was characteristically frank, saying bitcoin should be viewed as the “underworld of currencies” and criticizing the world’s largest producer of gold, Barrick Gold Corp., for it’s record in Tanzania.
But most of his remarks involved what he sees as a systemic failure by the gold mining industry to do its job properly. It’s not the first time Bristow has warned the industry is effectively producing at a loss. Two years ago, as prices hit a five-year low, he told analysts that half the metal coming out of the ground wasn’t profitable. That hasn’t changed despite a 20 percent-plus improvement in prices because it was accompanied by a drop in grades, he said in the interview.
In addition, large producers have re-focused on the developed world to minimize risks at the expense of asset quality, he said: “If you want to find elephants, go to elephant country.”
Meanwhile, Bristow blamed the widespread use of proxies by fund managers for the failure of executives and boards to be held accountable. He’s not the first to call for a reckoning within the industry. In September, billionaire John Paulson’s firm called for the creation of a coalition of gold investors to curb years of value destruction.
Paulson’s presentation cited $85 billion in lost value in the gold industry since 2010, but listed Randgold as offering the best shareholder total returns. The Jersey, Channel Islands-based company has the highest profit margin among large producers after Polyus PJSC, according to data compiled by Bloomberg.
But Bristow said Paulson’s Shareholder’s Gold Council isn’t the best way to clean up the industry.
“Management can’t be overly reckless with capital if it’s not allowed to be,” he said. “What’s missing there is a recognition that fund managers have been equally, or more reckless. I’m not sure that creating another club is the right approach.”
Large funds need to become much more active in working to appoint and remove board members rather than relying on proxy managers, Bristow said.
Survival Deals
Meanwhile, “survival mergers” are needed because the industry has too many junior miners with single short-lived assets, he said.
The industry is headed for a dramatic supply shortage from 2020 if gold prices stay between $1,000 and $1,400 an ounce, he said.
Input costs probably will rise as “you’ve got a complete over-inflation of value in just about every asset class and industry in the world, with burgeoning central bank balance sheets.”
The result will be higher gold prices -- but history has proven that’s not necessarily what’s best for the industry, he said.
“It would have just been very nice for the gold price to stay at $1,040 for another six months so it would clean the industry up,” Bristow said. “It just was too short-lived, that low gold price.”
Astute! And Slavo's a Pyro....
Ms. Ljubica Stefanovic, President is the reason why I knew that this ticker is a fraudulent make believe company .
Thanks. I'm not sure where I first heard about the scam company EFLN. Could have been your post here.
Wel, they're still at it with the lies and blatant fraud with yet another hilarious bit of garbage. Note the misspelled words:
http://ih.advfn.com/p.php?pid=nmona&article=75588780
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/
I agree [I trust "8" ]
One would think they would be more interested in attracting US investors, including possible institutions since they are so broke, but I guess not.
lol. maybe they read your post.
http://kerrmines.com/release/?id=122650
The old symbol was leftover from when the Company was still Armistice Resources. Armistice for years was pushing an old underground exploration project next to Kerr-Addison's played out mine on the Larder Lake Trend in Ontario. Armistice had quite the checkered regulatory history to boot.
Armistice changed their name to Kerr about 3 1/2 years ago. They changed their TSX trading symbol to KER immediately, but they never bothered to change their pink sheet symbol until now. That just demonstrates just how unimportant their unregistered pink sheet trading is. Not many US persons are interested in their non-SEC registered trading, even with their primary asset being located in the US. One would think they would be more interested in attracting US investors, including possible institutions since they are so broke, but I guess not.
thanks. it caught my eye today because they got a symbol change.
Kerr is the current owner of Copperstone, which they got when they acquired the failed American Bonanza a few years ago. Copperstone and the other properties in the camp have sunk a number of companies throughout its history, and Kerr is not exactly thriving.
whatcha know about this one?
https://investorshub.advfn.com/Kerr-Mines-Inc-KERMF-26438/
In the Siskiyous.....
Good gawd, I just scrolled all the way through their last filing.... the Russian kook actually pasted over a post from the stock board here...
http://www.otcmarkets.com/financialReportViewer?symbol=EFLN&id=168471
For Release: Contacts: | Wednesday, August 24, 2011 |
FINRA Warns Investors of Gold Stock Scams
WASHINGTON - The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called"Gold" Stocks-Some Investments Mine Your Pocketbook to warn investors about investment scams that promote gold stocks and to provide information on how to invest in legitimate gold investments. With the price of gold bullion at record levels, there has been a proliferation of blogs, websites, YouTube videos and Tweets centered on investing in gold. And while there are legitimate gold investments discussed online, FINRA is concerned that some investors may fall prey to gold-related investment scams.
These gold scams may center on inflated claims regarding the stocks of gold mining companies whose stock value is often based on gold reserves that are difficult to estimate, much less verify. For example, the Securities and Exchange Commission (SEC) took legal action against a mining company based in Florida for false press releases claiming that a mining project in Ecuador contained gold reserves worth more than $1 billion.
Gold investments may also be touted in free lunch seminars and pushed by boiler room operations. The SEC charged six individuals for running a recent Ponzi scheme that used investment seminars to bilk 3,000 investors across the United States and Canada out of $300 million. Separately, the Commodity Futures Trading Commission (CFTC) took three actions against precious metals firms, including charging a boiler room telemarketing firm that purportedly purchased more than $23 million of precious metals for their customers.
"Con artists are using the run-up in the price of gold as a hook to part investors from their money. Investors should think twice before investing in any gold investment promising exponential returns, or any company that claims it is a buyout target for other mining companies," said Gerri Walsh, FINRA's Vice President for Investor Education.
FINRA's Investor Alert cautions investors to be on the lookout for any pitch for a gold investment that:
"Gold" Stocks-Some Investments Mine Your Pocketbook also advises investors that while legitimate gold and ETF investments may be an acceptable diversification strategy, these investments can be quite volatile. A heavy concentration of gold investments can leave investors overly exposed and at risk of losing a substantial percentage of their money.
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business - from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit www.finra.org.
MINING INDUSTRY FRAUD
The problem of fraud in the precious metals mining industry continues to plague Arizona investors. The Arizona Corporation Commission's Securities Division has prepared this bulletin as a guide for the type of questions individuals should ask before investing in any mining program. All investments have risk, and no particular investment is guaranteed not to fail, no matter how diligently an investor has investigated the program prior to investing. Investigation prior to investment can reduce the risk of fraud.
One of the first questions you should ask before investing in a mining program is …
WHERE IS THE MINE LOCATED?
The exact location of the mine site is often not disclosed in many mining investment scams, yet surprisingly people continue to invest in these programs without knowing where the actual mining is to take place.
Press the people who are offering the investment to you (the offerors) for the exact legal descriptions of the site-do not accept a lay description such as "the proposed mine site is located approximately twenty-five miles northwest of Flagstaff, Arizona." That type of description tells you nothing at all about the true location of the site. If the offerors cannot or will not provide you with the exact location of the mine, DO NOT INVEST!!
Once you know the exact location of the mine site, your next question should be …
HAVE ANY ASSAYS BEEN PERFORMED ON THE ORE?
Usually, offering materials do provide what the offerors claim to be assays, but beware. Assays are only meaningful if they are based upon a systematic and scientific program of ore sampling. An assay based upon one or two ore samples is essentially meaningless it takes literally hundreds or thousands of separate ore samplings to properly evaluate the true potential of a mine site. Also be aware that even an accurate assay only tells you the amount of certain precious metals in a specific ore sample, not the amount of precious metals that can be economically extracted from that minesite or even that sample. No mining or refining technique can
economically extract all of the precious metals present in an ore body.
In reading assay reports, certain "red flags" signal that perhaps you are not receiving accurate information:
Reports indicating the presence of ½ ounce or more of gold per ton or ore. A mine site with ore values consistently this high would represent one of the richest finds of the century! Reports of precious metals not normally found together in the same ore. For example, while gold and silver are commonly found together, gold and platinum group metals are not.
Reports that traditional "fire assay" methods will not give an accurate reading of the precious metals content of the ore, while the offerors' "secret" or "revolutionary" methods will. A fire assay performed in a correct manner will give an accurate reading of the precious metals content of any ore sample.
Assayers who meet certain qualifications are registered with the Arizona Board of Technical Registration; call the Board (602-364-4930) to see if the assayer is registered, and if there is any information available concerning public actions against the assayer.
If mining is currently going on at the site, be sure to get copies of all production reports. Once you are satisfied that the ore at the mine site has commercial value, you are ready to ask the next question:
WHAT IS THE PRIOR MINING OR REFINING EXPERIENCE OF THOSE WHO WILL BE IN CHARGE OF THE MINING OPERATION?
Do not trust your money with people who have no prior experience in the mining industry. Mining is a highly skilled and technical profession, a field that cannot be profitably pursued by amateurs. If possible, check out ALL of the mining and business references provided by the offerors. If they have not provided you with any references, require them. If they have no references they can give you, or if their references are so vague that you cannot check on them, then the operators may not have any mining or refining experience.
You should next ask …
WHAT IS THE FINANCIAL CONDITION OF THE PEOPLE WHO WANT MY MONEY?
Are the people to whom you will be giving your money financially solvent? Are they a newly created company with little or no assets? Do they personally have any financial stake in the venture, or are they merely a group of people who want to enter a high risk venture using other people's money? You don't know the answer to these questions until you see balance sheets, profit and loss statements, and other audited financial documents. Once again, if these types of financial statements are not provided to you, require them.
Remember that the most meaningful financial statements are those that have been prepared by an independent certified public accountant.
Your next question is …
HAVE ANY OF THE PERSONS ASSOCIATED WITH THE OFFERING BEEN THE SUBJECT OF PAST ACTION TAKEN BY A GOVERNMENTAL AGENCY OR PRIVATE PARTY?
Obviously, you want to know whether the people to whom you will be giving your hard-earned money have a history of law violations, civil lawsuits, or bankruptcies. Just as obviously, if the people who want your money do have such histories, they will naturally be reluctant to reveal their prior legal problems to you.
Contact the Securities Division for information about federal
or state securities law actions. Also, contact the mining
department, any other appropriate state agencies, and the Better Business Bureau. If the mine site is located on public land, contact the state's land department, or federal agencies such as the Bureau of Land Management or the Forest Service.
Review civil and bankruptcy court records. (Important numbers are listed on the last page of this bulletin.)
Having satisfied yourself that the people to whom you may
be giving your money do not have a history of law violations,
you should next ask …
WHAT ARE THE COSTS AND OBLIGATIONS INVOLVED IN INVESTING IN THE PROGRAM?
How much is the investment going to cost you? What are you to receive for your money? A certain tonnage of ore? A certain number of ounces of precious metals? Stock? A pure cash return on your investment?
How is your investment to be made? In a lump sum, or in the form of periodic payments? Could you be required to provide additional money at some time in the future? Under the terms of the offering, must you meet any obligations or perform any duties other than making the investment? Once you understand the costs and obligations involved in investing in the program ask …
WHAT ARE THE RISKS INVOLVED IN INVESTING IN THE PROGRAM?
All investments have some amount of risk involved in them,
and the general rule is this: the greater the potential profit,
the greater the potential risk.
What assurance do you have that the offerors will not simply take your money and run? Is your investment secured by real property or equipment? (NOTE: It is a "red flag" if the promoters are guaranteeing that you will not lose money, whether they are offering your money back on demand or guaranteeing that a certain amount of gold is available.)
If the price of gold drops suddenly, would it still be feasible to mine? Does the mining program depend upon a continuous stream of investment capital in order to operate the mine? If it does, what if the stream of money decreases or is cut off? It can take millions to begin a viable mining operation.
Do the mine operators have any conflicts of interest that could cause them to devote less than their best efforts to the mining project?
Mining is inherently dangerous. If a worker gets injured at the mine site, could you be held financially responsible? If an injured worker sues the mine, is there enough liability insurance to cover the worker's claims?
If you are satisfied that you completely understand the risks
involved in investing in the program, your next question is …
EXACTLY HOW ARE THE OFFERORS GOING TO USE INVESTOR PROCEEDS?
You need to know just where your money will be going. Would some of your investment funds be used to pay sales commissions to the offerors or others? Towards salaries, legal fees, or other administrative expenses? How much of your investment money is actually going directly into the mining or refining of ore? What types of fees are going to be paid to the offerors? For what services? Arizona securities law requires that full disclosure be made to investors of the exact uses of proceeds in the venture. Finally, before you reach for your checkbook, you need to ask one more question…
CAN I AFFORD TO MAKE THIS INVESTMENT?
Be guided by your head, not your heart. Do not let "gold fever" lead you down an empty mine shaft. The basic warning to keep in
mind when considering any investment, including mining investments, is this:
IF YOU CAN NOT AFFORD TO LOSE ALL OF YOUR INVESTMENT, YOU CAN NOT AFFORD TO INVEST!
Arizona Important Contact Information
Arizona Corporation Commission's Securities Division 602-542-0662
(Toll free within Arizona) 1-866-VERIFY-9
Arizona Attorney General's Office Complaint & Information Center 602-542-5763
Arizona Department of Mines and Mineral Resources 602-255-3795
Arizona Mine Inspector's Office 602-542-5971
Arizona Department of Environmental Quality 602-542-4791
Arizona Board of Technical Registration 602-364-4930
U.S. Bureau of Land Management (Phoenix) 602-417-9200
U.S. Forest Service (Phoenix) 602-225-5200
Better Business Bureau (Phoenix, Flagstaff, Yuma) 602-264-1721
(Tucson and Southern Arizona) 520-888-5353
For additional information on how to investigate any offering before you invest, see "How Do I Verify Before I Buy Investments?," available on the Securities Division's web site
at: www.azinvestor.gov
(Click on Investor Info Center) or call 602-542-0428.
http://www.azinvestor.gov/InfoCenter_Docs/guide%20to%20mining%20investments.pdf
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