Review of Dessir core reveals salting of samples

“Salt vt: to enrich (as a mine) artificially by secretly placing valuable minerals in some of the working places” (Webster’s New Dictionary).

Although Webster’s definition doesn’t necessarily portray the exact circumstances, Dessir Resources (VSE) recently had its name added to an infamous list of companies connected with “salting” scams. The list includes the likes of New Cinch Uranium which dates back to the early 1980s. J.H. Montgomery, a consulting geological engineer hired by Dessir at the request of the Vancouver Stock Exchange, recently concluded that placer gold was added to core samples from drilling on the Gibbs property in Mariposa Cty., Calif., significantly elevating assayed gold values from drilling. The FBI is now involved and market surveillance at the VSE is reviewing trading activity in Dessir.

Dessir has an option to earn a 50% interest in the 40-acre property from privately owned A.T. & E. Mining. To date, the company has paid A.T.& E. a total of US$1.4 million and issued 200,000 shares.

In order to become vested, Dessir was required to issue A.T. & E. a further 2.8 million free trading shares on receipt of an engineering report showing the 50% interest in the property was worth a minimum of US$4.5 million. Drilling late last year returned some spectacular assay results, including 68 ft. grading 1.72 oz. gold per ton in Hole 12 and 113 ft. grading 0.60 oz. gold in Hole 13.

The drilling results vaulted the issue to a high of $3.35 from under a dollar as the promotional machine was cranked up with multi-million-dollar earnings projections.

Following the completion of 15 holes, Marshall Smith, a consulting geologist and geochemist, issued a report in November estimating proven and probable reserves on the property at 825,689 tons grading 0.86 oz. gold per ton. He valued the reserve, based on discounting cash flow at 12%, at more than $75 million. Given the discounted value, the report supported the issuance of shares to A.T. & E. for the 50% interest as well as proceeding to production. Because of inconsistencies between drill hole logs and visual inspections, the VSE did not accept the report, and asked Dessir to bring in another consultant acceptable to the exchange to review the data.

Dessir hired Montgomery in December and on Feb. 6, the company notified the VSE that the examination of reject material from holes 12, 13 and 14 indicated that placer gold may have been added to the samples prior to assaying.

As a result, the VSE halted Dessir pending the outcome of Montgomery’s report. The majority of the original assaying was done at Bondar-Clegg in Sparks, Nev., where Montgomery retrieved reject samples from drill holes 12, 13, and 14. In addition, the split drill core was retrieved from the property and core from holes 12, 13, and 14 were tested along with holes 1 through 9. Assays of the original reject samples from the three holes were similar to those reported by the company but the pan concentrates were found to contain placer gold.

Montgomery noted that no such mineralization was found in rock chips or polished thin sections and that on testing the respective sections of the drill core which coincide with the reject samples, no gold was found in the pan concentrates and no gold was found on assaying the core. This led him to conclude that placer gold was added to the drill samples at some point. John Knight, an expert on “fingerprinting” alluvial gold, determined that the gold present in the sample rejects has characteristics similar to Klondike placer gold. He also concluded that as a result of the well preserved nature of the gold particles, they were likely added after crushing in the laboratory.