CDNX suspends Birch Mtn

Yet another ghost-gold exploration project hit the regulatory wall on June 28, when the Canadian Venture Exchange suspended trading in shares of Birch Mountain Resources (BMD-V), a company that has built its market presence on a “prairie gold” program in northeastern Alberta.

The CDNX halted trading in Birch Mountain shares on June 16, after a mid-day news release by the company on June 15. It imposed the suspension on June 28, saying it would require “an independent review and verification of the company’s proprietary precious metal extraction technology and the reported occurrence of precious metals on its Athabasca Prairie Gold property.”

In the announcement, Birch Mountain said it had “confirmed the nature of metals on its Athabasca property,” and that “the form of the metallic elements . . . has not previously been reported in nature.”

Douglas Rowe, president of Birch Mountain, said he could not comment on the substance of the discovery, as the company was currently in discussions with the exchange. He did say the exchange had been provided with some of the reports for its own review.

Birch had previously said it had “conclusively proved” anomalous concentrations of gold, platinum, palladium and other platinum group metals in Athabasca samples using electron microprobe analysis of individual mineral grains, which it admitted could not be reliably quantified by chemical or physical methods of analysis. Hugh Abercrombie, the company’s exploration manager, told The Northern Miner last February that “standard fire assay is not capable of getting these [precious metal concentrations].”

Birch Mountain now suggests that the hitherto unreported speciation of gold and platinum group metals is the reason laboratories have been unable to reproduce the in-house precious metal concentrations Birch Mountain claims are there. It has not described these “new forms” of mineral species, which was part of the reason for the exchange’s halt to trading and the subsequent suspension.

Birch Mountain’s release named both the Canada Centre for Mineral and Energy Technology (CANMET) and the University of Calgary as centres where the new metallic species had been verified. Scientific staff at CANMET could not confirm or deny that the work had been done, citing the centre’s client-confidentiality practices. At presstime, the Miner was unable to confirm the work with staff at the university’s Department of Geology and Geophysics, but exploration manager Abercrombie is an adjunct professor in the department and has worked with permanent staff there before, principally with Prof. Ian Hutcheon, a specialist in the geochemistry of sedimentary rocks. Hutcheon was away and unavailable for comment at the time.

Birch Mountain says it is still working on a “fire assay protocol” for its Athabasca samples, with verification testing to be done by Strathcona Mineral Services. The company says its development work on the analytical method has been more difficult than expected. The verification program is effectively at the same stage it was when the Miner last reported on the Birch Mountain program (T.N.M., Feb. 7/00).

Rowe tells the Miner that Strathcona is awaiting instructions to proceed with the testing program but that it has done nothing since it sampled trenches on the property earlier this year. “We’ve been working on trying to get a fire assay protocol developed that will accurately reflect what we believe to be the concentration of metals in these rocks,” he said. “That has proven to be more difficult than we thought. We actually thought a few months ago that we were very close to having that set up. Strathcona just advised us that whenever we’re ready . . . to provide them with the protocol and they’ll look at it. So they’re really not doing anything other than, they’ve sampled the rock and they’re keeping chain-of-custody samples.”

Instead of continuing with the verification project, Birch has shifted its resources to developing recovery methods, saying in its release that extracting the precious metals into solution is “relatively simple” technology.

Exactly what it is about the unusual precious metal forms that makes them readily soluble, but impossible to analyze by conventional spectrographic methods once they are in solution, has not been revealed.

The exchange’s action earned it derision on two active Internet message board sites, Raging Bull and Silicon Investor. The Birch Mountain discussion threads on both sites — dominated by messages from former desert-dirt boosters posting under pseudonyms — bristled with complaints and posts urging letter and e-mail campaigns directed to the CDNX and the U.S. State Department, on the creative legal grounds that the halt constituted a freeze on the assets of U.S. investors in Birch Mountain.