EDITORIAL PAGE Say too much of say too little

Eyeball assays. It is not our term, but it is one that has apparently taken hold in the exploration field. Or perhaps we should say in the promotion field. It is an apt expression. Essentially, it refers to the practice of judging by visual inspection the potential value of diamond drill core.

And it is hot stuff these days. Witness the stock trading of two VSE-listed juniors, Bellex Mining and Quattro Resources. In the past six weeks the stock price for Bellex has soared from 85 cents to $5.12 and then plummeted to 64 cents while Quattro has gone from $3.50 to $10 to $3.05. And large volumes of these stocks have changed hands.

What prompted the market action was some drill core from the Galore Creek area in northwestern British Columbia. The company said visual inspection indicated “significant gold values.” When assays were announced, two weeks later, the actual values were less — much less — than anticipated and the stock prices tumbled.

Now one might fault the companies for prematurely judging drill results. The promoters, one might believe, were carried away with their own optimism and believed that withholding news of the drill core appearance might be construed as withholding material information. Visual inspections of drill core aren’t normally considered material information, but anyone who was around at the time of Kidd Creek might argue with that.

To some extent, playing up the “look” of drill core goes on every day. Reports of visible gold or massive sulphides are common and anticipation of assay results runs high. What is peculiar is that this particular play was so — dare we say it — successful. Somebody, no doubt, made a lot of money on the trading activity.

Investors knowledgeable about mining exploration were probably cautious considering the nature of the information that came out. Others persuaded by more sensational accounts in the popular press, however, might have jumped in.

It is not the first time this has happened, of course. What is ironic, however, is that the same publications and radio stations that prompt much of the excitement with sensational coverage are the ones that will decry the plight of investors who fall prey to “ruthless promoters” when dealing with mining stocks.

It is difficult to be too critical of these promoters, however, when others are being criticized for not alerting the public to drill information in a timely manner. A good promoter knows that timing is everything, but even the best might find it difficult to walk the tightrope of current regulations. Is it better to “sit” on seemingly spectacular drill core until a work program is completed and results compiled, or should all results be released hole by hole? If massive sulphides are detected in a core sample, a promoter might be forgiven for announcing “eyeball assays” in order to avoid later accusations of insider trading.

Just what is the best procedure, or at least what procedure is less likely to incur the wrath of the regulatory gods? We think an informed public is the best means of protection. That does not mean that every company detail or drill result has to be made the subject of a news release, but it does mean that publications such as The Northern Miner should be able to obtain information freely. Companies should not be constrained from discussing activities because they are afraid they might be divulging insider information.

In other words, let companies and promoters say what they like, but let them also be accountable not only to regulators but to the media. Regulators may feel compelled to arbitrarily single out alleged violators in order to make an example to others, but knowledgeable inquiries from the media could prove to be the best way to disseminate information.

That method is hindered now by rules that have promoters and others constantly looking over their shoulders, afraid to talk about projects for fear of saying too much, afraid not to talk for fear of saying too little.

It is time the rules were simplified and clarified, not to lawyers and accountants, but to the mining companies and promoters who have to try to live by them.