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Int'l Wayside's Bull & Bear recants for Callaghan
International Wayside Gold Mines Ltd IWA
Shares issued 37,963,497 May 10 close $2.04
Tue 20 Jun 2000 Street Wire
FLORIDA ASSISTS IN DAMAGE CONTROL
by Stockwatch Business Reporter
Bull & Bear publisher David Robinson says publishing an upbeat advertorial
promoting Frank Callaghan's International Wayside Gold Mines was a mistake
that stemmed from a series of miscommunications -- and the publisher takes
all the blame. "Frank never signed off this article," Mr. Robinson says.
"There were some inaccuracies. I'm running an apology in the paper, that I
made a mistake in running with that ad and that advertorial. There were
some errors in there that shouldn't have gotten in there."
Speaking from The Bull & Bear Financial Newspaper office in Clearwater,
Fla., Mr. Robinson says that he tried several times without success to have
Mr. Callaghan approve the article in the leadup to publication in mid-May.
"The moment we printed it, I'll be damned if we didn't get a call from
Frank changing some copy," he says. Mr. Robinson did not say exactly what
the Wayside president wanted to have changed in the story, or what was
inaccurate about it.
The offending June Bull & Bear was distributed in late May, and Wayside had
been halted two weeks earlier, "pending clarification of the company's
affairs and disclosure," according to the Canadian Venture Exchange. One
source of regulatory concern was the gold resource estimate for Wayside's
Cariboo gold project in central British Columbia. (A new resource
evaluation, released on June 2, would indicate "somewhat lower tonnage and
somewhat lower grade than previous estimates.")
While the new resource evaluation was being prepared, The Bull & Bear
advertorial was making the rounds in late May pumping the project and
quoting an excited Mr. Callaghan. It quoted Mr. Callaghan as saying that he
would be disappointed if the Cariboo gold project in the Wells-Barkerville
region of British Columbia did not have as much gold as Hemlo in Ontario.
"The assays are as good as we could ask for and still be legal," the
promoter said in his June advertorial. "It's got the potential to grow
tremendously." Mr. Callaghan also likened his accidental discovery to
standing in the middle of a lake "so big you can't see to either side."
An advertorial is a story written on demand by a paying client.
At first, Mr. Callaghan disclaimed any responsibility for the statements
attributed to him. "Mr. Callaghan denies making any and all such
statements," he said in a news release on May 30, the same day that the
comments appeared in Stockwatch. Following publication of the entire Bull &
Bear article, however, Mr. Callaghan approached the matter from a different
angle. In a June 12 article in The Vancouver Sun, he ridiculed the
nonsensical nature of some of the comments attributed to him. "I was
misquoted," he protested. "I mean, how do you stand in the middle of a
lake?"
In any event, the resulting publicity from Mr. Callaghan's Bull & Bear
quotes has not made it any easier for the CDNX to allow the promotion to
get up and running again. As participating brokers, such as Haywood
Securities, assist in straightening up the company with stronger directors
and the appearance of corporate responsibility, promoter Callaghan is
undoing their good work. It seems to be a case of one step forward and two
steps back. Now it is Mr. Robinson's turn to help with another step
forward. This up and coming piece of teamwork will take the form of an
official letter from the publisher for Mr. Callaghan, stating "exectly what
happened." The details of the "it's all my fault" letter will probably be
known only to Mr. Robinson, his client, Mr. Callaghan, and the CDNX, but it
should provide the exchange with a stepping stone toward lifting Wayside's
long halt.
Although Mr. Robinson claims to not have much connection with Vancouver or
Howe Street these days, the publisher and The Bull & Bear figured
prominently during the week-long David Baines vs. George Chelekis
defamation trial in the Supreme Court of British Columbia in September,
1997. Mr. Chelekis was found guilty of defaming Sun business writer Mr.
Baines in two articles he wrote in the Bull & Bear in 1994, along with a
libellous press release, and then a slander in 1995. After publishing the
articles in late 1994 in The Bull & Bear, the articles and a press release
were reprinted in Robert Shore's Market News Publishing service in
Vancouver. In the court's April, 1998, judgment, Mr. Shore was held liable
for $250,000 in damages (this case is the subject of an application to the
Supreme Court of Canada), Mr. Robinson was held liable for $275,000, and
Mr. Chelekis was held liable for all $875,000 in damages.
Neither Mr. Chelekis nor Mr. Robinson faced their accusers in court, and to
date have not paid Mr. Baines anything.
Whether or not Mr. Robinson's statements will be enough to get Mr.
Callaghan off the hook and provide for the CDNX a way out of this
single-stock problem remains to be seen. In the meantime, a lot of unwanted
light is being shined onto what has the appearance of an old-time mining
promotion featuring more promise than gold. Letter writer John Kaiser was
quoted in the Vancouver Sun calling Mr. Callaghan a "colourful, old-style
Howe Street promoter" -- the opposite of what the newly minted and
tech-heavy CDNX wants to convey.
Later, in a June 14 Bottom-Fish Tracker, Mr. Kaiser showed sympathy for Mr.
Callaghan's predicament, especially because the CDNX seemed to be picking
on him while ignoring what were in his view bigger problems with other
companies. "I find it ironic that the CDNX is beating up on poor Frank
Callaghan and his International Wayside on the suspicion that this play is
another Bre-X in the making," Mr. Kaiser said.
Mr. Robinson says the origin of Mr. Callaghan's Hemlo comment came from
analyst Glen Brown of Haywood Securities in Toronto. He quoted Mr. Brown's
April 10 market commentary as saying: "The newly discovered types of
mineralization and its high-grade nature are clearly significant. There
have not been grades or thicknesses of this kind in a new discovery in
Canada since Hemlo and Eskay Creek."
"The girl (writer) asked him about that statement and Frank said I'd be
very disappointed if it wasn't," Mr. Robinson told Stockwatch. "If I'd have
looked at it I'd probably have said, Frank, that's a little boisterous to
say that and you probably don't need that." Mr. Robinson stresses, however,
that his upcoming apology, along with a newly cleansed advertorial, were
wholly of his own making and did not result from pressure brought by Mr.
Callaghan, his sponsors, his new directors or the CDNX .
Analyst Mr. Brown says he cannot comment on the matter because Haywood is
providing corporate finance advice to Wayside. "I can't say," he says.
"Haywood is trying to repair the company." |
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