Former CEO altered Wawa gold assays, Red Pine says

Shares in Red Pine Exploration (TSXV: RPX, US-OTC: RDEXF) plunged 30.4% Friday on news the company believes its former CEO was behind “unauthorized manipulation” of assay results from its Wawa gold project in northern Ontario.

The conclusion was drawn after reviewing the chain of custody of assay results that were sent from Activation Laboratories of Ontario and those later used for public disclosure, which had shown inconsistencies.

During the investigation, the gold explorer found that while the correct drill core assays were sent via email by Actlabs from the spring of 2015 until Jan. 30, 2024, they were only addressed to its former CEO. Red Pine believes he tampered with some of the results and sent them to company staff.

The results were subsequently downloaded into Red Pine’s database and later used for a variety of purposes, including in-house resource modelling and its most recent NI 43-101 technical report dated June 21, 2023 (with an effective resource date of May 31, 2019), the company claimed.

In total, 532 out of about 98,000 drill core assay results in the overall database appear to have been manipulated since Red Pine acquired the Wawa gold project in 2014.

The news release did not identify the former chief executive, however, Quentin Yarie was in the CEO role from July 2015 until Feb. 21 this year. The Northern Miner has reached out to him requesting a comment. 

‘Major setback’

The shares drop was the second since May 1, when the stock fell 61% to 8¢ apiece, after the company said it had withdrawn previously announced assay results amid a review of inconsistencies it identified. 

The company divided its investigations over a period of assay results received between 2014-2019 that resulted in the mineral resource estimates set out in the technical report. A second period covered 2019 to the present, during which assay results were disclosed through news releases.

For the first period, Red Pine has determined that the inconsistencies will mean a reduction in resources for Wawa’s Surlaga and Minto deposits. It estimates the Surluga area will lose an estimated 39,500 to 54,000 oz. (between 205,000 and 240,000 tonnes grading, on average, 6 to 7 grams gold per tonne) from inferred resources, versus the previous estimate of 2.4 million tonnes grading 5.22 grams gold per tonne. The indicated resource of 1.2 million tonnes grading 5.31 grams gold is not expected to change.

The Minto deposit will lose 8,000 to 12,000 indicated oz. (between 30,000 and 40,000 tonnes grading 8.5 to 9.5 grams gold), and 16,000 to 20,000 inferred ounces (75,000 to 85,000 tonnes grading 6.5 to 7.5 grams gold). It was previously reported to hold 105,000 indicated tonnes grading 7.5 grams gold per tonne and 354,000 inferred tonnes grading 6.6 grams gold.

For the second period, the company said the investigations are continuing and hopes to provide an overview of the manipulation implications on the drilling results prior to market open on May 15.