Another scandal rocked the mining industry this week as Delgratia Mining (DELGF-Q) reported that someone had tampered with samples from its Josh property in Nevada.
Situated south of Las Vegas, the 9,000-Acre property has, in recent months, been the focus of controversy related to the veracity of assay results received from drilling.
Suspicions were raised when the company first announced that it had intercepted gold mineralization over sizable widths in what turned out to be valley-fill gravels, an unlikely geological source for such high-grade intersections. Those suspicions proved to be justified after an audit revealed evidence that samples from the drilling had been tampered with.
The audit, conducted by Brian Mountford and Morris Beattie, concluded that the Josh property contained “insignificant gold.” It also noted that “any gold detected beyond background amounts was introduced into the samples after they had been collected at the drill.”
Charles Ager, president and chairman of Delgratia, agreed with the statements but claimed that his company was “the victim of data falsification.” He also said “the company is taking steps to notify law enforcement authorities,” though exactly which authorities was not made clear.
While some press reports suggest that Delgratia knows who did the tampering, this information has not been made public. The company could not be reached for further comment.
The National Association of Securities Dealers Automated Quotation (NASDAQ) halted trading on the issue on May 19 and summoned company personnel to Washington, D.C., to meet with the listings qualifications panel. The exchange had halted trading of the company previously, from March 20 to April 11, after the stock lost half its value on March 19. The company offered no explanation as to why the value of the stock had plummeted.
Before the “no gold” announcement, a class-Action suit had been filed against Delgratia charging certain of its officers and directors with having violated federal securities laws. Filed in U.S. District Court, the suit alleges that the defendants, including Ager, made false and misleading statements about the Josh property.
Ager may have trouble convincing the plantiffs that he was “the victim of data falsification.” The lawsuit alleges that Ager controlled the company that was conducting exploration on the Josh property and had personally selected, as the project’s assayer, “a person who was a long-Time business associate, a convicted securities fraudster and [that] neither a licenced nor [an] independent outside lab [was used].” Several analysts visited the lab in question and noted a prominently displayed sign stating that it was “not a registered or accredited assaying lab.”
The statement of claim further alleges that Ager “held a substantial undisclosed economic interest in the success of the Josh project.” The plaintiffs seek to recover damages on behalf of purchasers of the stock during the period between Nov. 18, 1996, and April 11 of this year.
The share price rose steadily to a high of US$34.75, only to plummet to US$16 on March 20, 1997. Trading was halted for three weeks following the price crash.
When trading resumed on April 11, the share price fell to US$8 on heavy trading. During that week, a news service reported that the company’s assayer was under investigation by the Arizona board of technical registration.
However, by April 15, the share price had closed up US$6 to US$17.50 per share. The shares were trading at US$12 before the salting disclosure.
Be the first to comment on "Delgratia stung by salting"