After spending $15 million, including $2.7 million raised earlier this year,
In the wake of an investigation by the Canadian Venture Exchange, the company now says it “regrets” certain statements made in a string of press releases that “may have created the impression” that the properties held gold concentrations of economic interest.
“Based on current standards of mineral disclosure,” the company stated, “there is no evidence supportive of the occurrence of precious metals in potentially economic concentrations or quantities.” This confession applies to the Alberta properties, as well as to ground in the Dawson Bay region of west-central Manitoba.
In previous documents, Birch Mountain had used the term “anomalous” to characterize “the population of micro-particulate precious and non-precious metals qualitatively determined to be present in certain samples.” However, because “anomalous” is often used as a quantitative term, Birch Mountain will now use the term “unusual” instead.
In Birch’s usage, “unusual” means “the detection of one or more precious metal particles greater than 0.5 micron in one dimension, in a search comprising electron microscope examination (at 200 times) of a minimum of one hundred 400-micron-by-500-micron search areas on a broken rock surface.”
However, despite Birch’s documentation of numerous samples containing these “unusual micro-particulate precious metals,” almost all the thousands of samples analyzed returned values at, near or below the lower limit of detection.
Simply put, the value is about equal to, or even less than, the measured global average for gold concentrations in sedimentary rock. “Therefore,” Birch Mountain admits, “on the basis of conventional fire assay, the concentration of gold in these rocks in not anomalous.”
The company also admits that “no other samples from Athabascan have yielded reproducible gold or platinum group metal concentrations exceeding 0.5 gram gold per tonne by conventional fire assay.” However, the company has always maintained that, for some unexplained reason, conventional fire assaying wasn’t capable of detecting “prairie gold.”
This prompted the company to set up its own lab, which in turn led to the identification of what Birch Mountain believes to be “the first documented occurrence of natural nanoparticulate (0.0001- to 0.1-micron) metal” in two rock samples from Athabascan. The company also says this form of metal was observed “in a solution extract” in tests done at the University of Calgary and at a Canadian government laboratory.
Saying the company had to conform to CDNX disclosure rules, Birch president Douglas Rowe said he could not be precise about the nature of the material in the solution extract. He did say, however, that the natural nanoparticulate metal was a base metal, not a precious one. The company also conceded in its press release that the university and government labs had not detected precious metals in this form, or in any other.
In any event, Birch Mountain now retracts previous statements referring to the identification of “a new form of precious metals,” as well as statements relating to its ability (through extraction technology being developed) “to estimate levels of and extract precious metals into solution.”
While in-house tests were previously reported to have found precious metals in solution extracts, the company now admits that it was unable to reproduce those results “despite careful attention to replicating conditions and procedures of tests yielding positive results.”
Furthermore, Birch Mountain now admits that it never submitted an assay method to Strathcona Minerals, which was hired in 1999 to conduct independent sampling and provide an assessment of assay methods under investigation by Birch Mountain. The company also retracted a statement made earlier this summer that it had independently verified its extraction technology.
The company agreed to the appointment by CDNX of an independent auditor, who will determine whether or not there is “reasonable evidence of potential economic concentrations of minerals, and reasonable evidence of potential commercial applications for the technology under development.”
The search for “prairie gold” was controversial from the start. The original properties were assembled by local entrepreneur Ken Richardson, who, operating from a basement laboratory, claimed to have found a secret way to extract gold and platinum “in breathtaking quantities.” He also obtained good results from labs that were not registered or accredited.
Several outside parties investigated the properties and found that certain samples that were reported to have high values had been “pre-treated” by an assayer who refused to disclose the nature of the solutions used in the process.
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