Didn't know if this was posted here yet or not.
I still think at this price you can't go wrong.
By Tim Wood
19 Jan 2005 at 04:39 PM EST
NEW YORK (ResourceInvestor.com) -- There is no shortage of scoundrels trawling the resources bull market intent on parting suckers from their money. Whether it’s hyped promotion about billions of this and that, mystical geology or plain fraud, it’s happening all the time. United Development International, or UDI Resources, takes the cake though.
This pink sheet promotion trades under the symbol UDVE and is worth a fraction of a cent; yes to the third and fourth decimal place.
What makes UDI worth a mention was the most amateur batch of press releases we’ve ever seen. The most outrageous was appropriately datelined Las Vegas and declared: “Five Ounces Gold Per Ton Discovered on La Ronge Gold Property.”
Well, that’s pretty impressive. In fact it’s stupendous at better than double Goldcorp’s Red Lake mine grade.
You’d think UDI would have immediately traded up at least a hundredth of a cent on the news. Yet not even the most spurious revenue projections based on this “discovery” could do the trick. However 10.5 million shares did trade today, managing to pull the stock up three hundredths of a cent by the close.
And it’s no one-trick pony: “Initial geology reports from a small drill sampling program lead management to believe this site could generate significant gold and possibly, diamond production over the next three years. Also, early indications from the limited sampling program lead management to believe proven reserve testing will yield results sufficient to justify investment in full-scale commercial mining facilities.”
We called two numbers supplied on UDI’s press releases. The number for UDI president, Robert Doherty, terminates on an answering machine in Kamloops, British Columbia. We did get a return call from someone who would only identify himself as “Merv” at “Global Explorations”. Global is supposed to be a contracted flacking service based in Reston, Virginia, but it has old links to UDI including an opaque Sierre Leone and Congo diamond deal. Doherty never returned calls despite promising to do so via e-mail.
It’s not hard to guess why there might be some reluctance to spin the story for the media. After all, “Merv” and his sidekick, apparently a “Ravi”, who chirped from the background every now and again, were beyond clueless.
Asked for the drill data that supports the claim for a 5opt discovery, he did everything except answer. It is clear that the strategy is to talk big and positive; say anything as long as it has little to do with actual facts. Pressed on the matter, “Merv” said the drill data was confidential, but assured us it was compiled after a drill programme undertaken one and a half years ago.
So why wait a year and a half? “The gold price was only $260,” said “Merv”. That gold price was last seen three-and-a-bit years back which fact put “Merv” off balance, but not for long. He returned to the script even as he agreed that the timeline was all wrong and that nothing was making sense.
“Merv” assured us that this “gold anomaly” was “all over the place”. Asked to be more specific he said a “private consortium” had put “30 holes” into the La Ronge property and arranged for “assays”. “Ravi” tried to be helpful on one particular question, coming up with an “intercept” width of “4.5 feet” for the 5opt discovery. One hole or many? No answer.
Perhaps they drilled through an amalgam filling lost by a bush pilot making a hard landing some time back?
“Merv” adroitly moved back to the sales pitch telling us that the first drill programme “only went to 500 feet. We’re going to 1,000 feet now! There’s gold everywhere!” When asked how exploration was being funded, “Merv” gave up and said Doherty would call. We’re still waiting.
The UDI Web site reveals that the La Ronge “gold properties” are subject to an unspecified earn-in agreement with a company owned by a UDI director, Chris Knudsen. Knudsen is also president of Clearview Consulting which apparently owns the La Ronge “project”. Clearview is an outfit that works “behind the scenes helping arrange financing for different feasible projects.”
Putting sprinkles on doughnuts is certainly feasible, both behind and in front of the scenes.
The La Ronge project information on the company Web site directly conflicts with that in the press release and “Merv’s” spiel. “From 1997 to 2001, 35 holes were drilled, with anomalous gold being intersected in 19 out of a 35 holes, with the best intersection averaging 1.05 ounces per ton over eight feet,” reads the spin for UDI’s “Canadian Initiative”.
So where does the 5opt over 4 feet come from, or the 30 holes, or the 2003 drilling? In the absence of the evidence we have asked for, it can only be someone’s fertile imagination.
Invest at your peril or delight in the clownish theatrics that are bound to get the wrong sort of SEC attention. Indeed, UDI plastered the “market” with two announcements today that hilariously mismatch headline and substance. For additional comic relief please do note this precision mapping of the project as provided by the company.
