Great Basin Gold Ltd. (fka GBGLF)

[goldenpolarbear]

Quote:
Nevada miner’s collapse leads to fraud action
Great Basin ex-director Segsworth facing court case

Stockwatch Daily31 Aug 2016By Mike Caswell
PAN AMERICAN SILVER

Walter Segsworth

CREDIT SUISSE AG has filed a case in the Supreme Court of British Columbia seeking information from former Great Basin Gold Ltd. director Walter Segsworth over what it sees as a massive mine overvaluation. Credit Suisse claims that it suffered substantial losses when Great Basin’s Hollister mine in Nevada proved to be worth far less than the $236-million it was valued at. (All figures are in U.S. dollars.) Mr. Segsworth, as a director, was party to many decisions surrounding the mine, Credit Suisse says.

The allegations are contained in a petition that Credit Suisse filed at the Vancouver courthouse on Aug. 25, 2016. The petition seeks a recorded deposition of Mr. Segsworth in connection with his work on the Hollister mine. The deposition is to be used as part of a fraud lawsuit in Nevada (in which Mr. Segsworth is not a defendant).

That Nevada case, as described in Credit Suisse’s petition, revolves around a valuation of Hollister that proved to be more than optimistic. Credit Suisse claims that it was the victim of negligent misrepresentation and fraud. It says that in March, 2011, it provided a $70-million loan to Great Basin, with the money secured by the Hollister mine. Unfortunately for Credit Suisse, that loan proved to be the start of a financial calamity, at least if the accusations in the petition are correct. About two years after Credit Suisse advanced the money, Great Basin Gold filed for bankruptcy protection. As part of the bankruptcy process, Credit Suisse advanced even more money as part of a debtor-in-possession financing, the petition states. It initially advanced $35-million, and eventually $51-million.

Credit Suisse claims that it made the loan and later debtor-in-possession advances based on misrepresentations about the Hollister mine. The firm says that it had received information that the mine’s reserves were estimated at 907,000 ounces of gold equivalent, and that its net present value was $236-million. The life of the mine was estimated at eight years.

After Great Basin Gold filed for bankruptcy protection, Credit Suisse discovered that the mine had a reserve of just 187,000 ounces of gold equivalent and a life of just three years, according to the petition. When the mine later sold, it went for just $15-million and a small percentage of future profits, Credit Suisse says. The petition does not spell out Credit Suisse’s exact losses, but it describes them as enormous.

While Mr. Segsworth is not a defendant in the Nevada lawsuit, Credit Suisse says that he is in a position to provide information as part of the case. In addition to serving as a director of Great Basin Gold, he worked as a consultant at the Hollister mine in 2012, according to the petition. He may also have been under consideration to be the restructuring officer of Great Basin, Credit Suisse says. The items that Credit Suisse plans to ask him about include the resources and reserves of the Hollister mine, life of mine estimates, and the integrity of some or all of the company’s officers and directors.

While the defendants in the Nevada lawsuit do not include Mr. Segsworth, they do include many of his associates, according to the petition. Those defendants are: Ferdinand Dippenaar, Lourens van Vuuren, Johannes Oelofse, Philip Bentley, Dana Roets, Willem Beckmann and Ronald Thiessen. The men are former officers or directors of Great Basin.

The petition seeks a court order that will direct Mr. Segsworth to attend a deposition at which he will answer questions under oath. Credit Suisse says that it has asked Mr. Segsworth to voluntarily provide the testimony, but he has not been co-operative. The information he provides will be used entirely for the Nevada court case, and in no other action, according to Credit Suisse.

Mr. Segsworth has not yet responded to the petition. Vancouver lawyer Peter Rubin of Blake Cassels & Graydon LLP filed the case on behalf of Credit Suisse.

Great Basin Gold no longer trades in Canada, the company having delisted from the Toronto Stock Exchange on Oct. 25, 2012. It still has a listing on the OTC Markets, where it was last at 0.14 cent.
(GBGLF)


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Where GBGLF was last listed at .14 cents REALLY? Well not in 2016...

Finally, Ron Thiessen and Ferdinand Dippenaar are being named as defendants in a lawsuit along with several former Directors of Great Basin Gold...

".. The information he provides will be used entirely for the Nevada court case, and in no other action, according to Credit Suisse. ..." What other lawsuits might be pending?

Why is the Burnstone Gold mine NOT mentioned in this lawsuit?
http://www.mcmillan.ca/LindaRocca

http://www.newestfilings.com/94179-great-basin-gold-ltd

Great Basin Gold – counsel to bidders in acquisition of various Nevada and South African gold mine assets in context of CCAA and Chapter 11 restructuring proceedings.

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http://www.finfive.com/success.html