EDITORIAL — Coggin and Niemuth should be unmuzzled — Freedom of speech

Early this year, Delgratia Mining stated that its Josh property in Nevada had reserves of 5 million oz. gold. The estimate was based on four drill holes, which included such impressive assay results as 440 ft. of 0.084 oz.

gold per ton and 1,120 ft. of 0.063 oz.

Not only was the resource projection premature; it did not make sense in context of the local geology. Questioned by reporters, Russ Fields, administrator of the Nevada Division of Minerals, expressed doubts about the veracity of the assay results. It was later found that they were bogus and produced from unregistered assayers. Shareholders filed a class-action lawsuit against the company and its directors and officers.

Meanwhile, in Arizona, Maricopa County Superior Court Judge Don Daughton has muzzled two state officials from making more negative comments about a controversial gold-platinum project operated in that state by International Precious Metals (IPM). The order will be in effect until a hearing on a permanent injunction is held, probably in early September.

Mason Coggin, director of the Arizona Department of Mines and Mineral Resources (ADMMR), and engineer Nyal Niemuth told the media and other parties that IPM’s claims of having a gold-platinum resource have not been substantiated by independent testing. In fact, two independent tests showed that the property contains only nil or trace gold values. One test was carried out a few years ago at the request of the Toronto Stock Exchange, while the other was done by ADMMR in 1994.

IPM argued that Niemuth and Coggin have no authority to make such statements and should restrict their duties to maintaining a rock library and the like.

The judge bought the argument, notwithstanding that ADMMR’s duties include making field and other investigations related to mineral properties.

The issue is a serious one in that a mining analyst from T. Hoare & Co. has stated that, “if a grade of 0.8 oz. gold [as reported by IPM] can be confirmed, IPM’s unproved resource is likely to be in excess of 43 million oz. of gold, platinum and palladium.” The author says the mineralization at Black Rock “exists in unusual mineralogical associations and therefore responds abnormally to conventional assay and recovery methods.” This is an old story that, to date, has never ended well. A decade or so ago, the Canadian Institute of Mining & Metallurgy published a paper by three respected mining professionals who had investigated more than a dozen projects where similar claims were made. In each of the cases, the positive assay results were found to have been obtained from procedural errors or because the samples or assaying reagents had been tampered with.

At this stage, we are not accusing IPM of stooping to such skulduggery. But we do know that the company uses an unregistered lab specializing only in the evaluation of such properties. And the company has told us that it sends its own reagents with samples to outside labs for assaying.

Because we have not visited IPM’s property, we shall refrain from making further comment until we see the results of a program by Behre Dolbear, which was retained by IPM to complete independent fire-assay analyses, and review its recovery process. These results are expected in a matter of weeks.

But ADMMR has visited the property and tested samples. We believe, therefore, that it should have the right to comment on the results. We disagree with the judge’s decision, as the matter is clearly one of public interest. If IPM takes issue with any of ADMMR’s statements, it should address them on technical grounds and not hide behind a gag order.