The Alberta Stock Exchange has halted trading of Timbuktu Gold (ASE) after drill results from its Sitakili property in Mali sent the company’s stock price into orbit.
Assays from two of 17 reverse-circulation holes were released on April 17: Hole 8 grades 10-187 grams gold per tonne from 28.5 to 91 metres; and Hole 11 grades 37-230 grams from 25.5 to 54 metres. Timbuktu stock, which had closed at $9.45 the day before the announcement, rocketed to $26.50 on a volume of just over 1 million shares.
The company announced, however, that each of the 17 holes encountered “an appreciable amount of water” at depths of 24-36 metres, raising concerns that gold might have washed into unmineralized samples by a sudden upward flow of water in the drill rods.
Timbuktu plans to conduct diamond-core drilling there to confirm the results of reverse-circulation drilling.
Following a second day of heavy trading, during which the stock fell $1.60, the ASE, citing the the company’s high price and past dealings of its chairman Oliver Reese, placed a halt on the trading of Timbuktu stock.
The ASE received word that Reese was once the subject of probes by both Canadian and U.S. securities regulators. The U.S. Securities and Exchange Commission twice charged Reese with violations of securities laws, in 1965 for fraudulent marketing of unregistered securities, and in 1987 in connection with a promotion called Mali-American Mines. The charges were dropped both times, after Reese agreed to stop selling the stocks.
The exchange is awaiting a statement from Timbuktu clarifying the results of the reverse-circulation holes.
Ray Antony, a director of Timbuktu, commented that issuing such a statement could take weeks, considering the turnaround time for gold assays on new samples. He said the trading halt is “in the best interests of the company,” since it would allow investors time to digest the drill results.
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