Editorial: Crimes And Rumours Of Crime

The 25th trading week of the year was one that made us wonder if we should set up a “crime page” in our paper.

• In Vancouver, John Paterson, the disgraced former president and CEO of one-time high-flyer Southwestern Resources, entered into a settlement agreement with the British Columbia Securities Commission with respect to the Boka gold fraud, which was uncovered in February 2007.

In the settlement, Paterson admitted that he received original assay certificates from Southwestern’s Boka gold project in China’s Yunnan province, and then transferred data containing 433 discrepancies in gold grades into Southwestern’s database.

The settlement gave a few examples of the grade overstatements in press releases issued over the years: May 19, 2004: 3.08 grams gold per tonne reported over 205.5 metres (actual grade was 0.143 gram); June 21, 2006: 2.95 grams gold over 147 metres (actual grade 1.07 grams); Feb. 13, 2007: 2.18 grams gold over 583 metres (actual 0.58 gram gold); Feb. 21, 2007: 8.67 grams gold over 71.8 metres (actual 1.46 grams gold).

At the same time, Paterson was making a fortune on his Southwestern stock — since given back — and sold out early to avoid the stock crash once the tampering was made public.

The fraud showed how, after so much attention was paid to sampling and sample prep in the years after the Bre-X Minerals scandal, the weak link in the process moved a little bit downstream to something as simple as data entry.

On the other hand, the fraud was nipped in the bud while the project was still at a relatively early stage, well before any bankable feasibility study or takeover bids, showing the relative effectiveness of the National Instrument 43-101 standards introduced with much care after Bre-X.

• At the blunter end of the crime spectrum, the French police arrested 25 people allegedly connected to the brash midday holdup of Harry Winston Diamond’s swank Paris salon last December. Roughly US$118 million in merchandise was taken, making it the biggest robbery in French history. The French press reports that the suspects, who are mostly locals and included a salon employee, were under surveillance for months prior to the arrests.

Meanwhile, The Times of London reports that, in yet another example of the spate of jewelry heists across Europe, French police are hunting a “gentleman robber” who stole more than US$8.4-million worth of goods in broad daylight from the Chopard jewelry shop on the chic Place Vendome.

• Back home, after an external audit of operations released June 29 by Deloitte & Touche, the Royal Canadian Mint in Ottawa still can’t rule out theft as the cause of $15.3 million in gold and other metals that has gone missing. The auditors said that an accounting or transaction error could not account for 17,500 oz. of gold that’s vanished.

The Royal Canadian Mounted Police are now involved and will soon decide whether there’s enough evidence to launch a full criminal investigation.

• In a tale of missing inventory that’s ended on happier note, a Dutch rescue crew using a submarine robot has found 9.6 tonnes of gold and silver in the cargo hold of the shipwrecked Polar Mist.

The armoured Chilean trawler was abandoned by its crew on Jan. 15, during a storm in the Magellan Straits, some 40 km offshore from Argentina. The ship was then adrift for a day when the Argentine Coast Guard found it being pulled by the Chilean tug Beagle, which was then ordered to take the ship back to Punta Loyola. The ship then sank on Jan. 18, allegedly during another storm.

The gold and silver came from the mines in Santa Cruz province operated by Cerro Vanguardia (a subsidiary of AngloGold Ashanti) and Minera Triton (a Pan American Silver subsidiary). The precious cargo had been on its way to Punta Arenas, Chile, where it would have been flown to Santiago, Chile, and onwards to Switzerland.

The next step is to figure out the best way for divers to recover the bars which rest at a depth of 80 metres. The ocean-floor find puts to rest the wild speculation that some kind of heist had occurred.

• The Northern Miner gets results. Less than 24 hours after last week’s editorial was posted online regarding Appleton Exploration’s touting of its Malian gold intercept, the company had to put out a second news release explaining to shareholders that what was promoted as a 10-metre high-grade intercept was in fact 1 metre in length.

Send your Letters-to-the-Editor and other op-ed submissions to the Editor at: tnm@northernminer.com,

fax: (416) 510-5137, or 12 Concorde Pl., Suite 800, Toronto, ON M3C 4J2.