Bill, here's a blast from the past they might want to read, put out by Forbes. Too bad the picture is no longer available, it was classic.
Glitter, but not gold
By Zina Moukheiber,06.16.97
LEE FURLONG says his Toronto-based International Precious Metals Corp. has discovered gold and platinum amidst the desert shrubs 90 miles west of Phoenix, right off Interstate 10. Echoing his enthusiasm, analyst Gavin Wilson of T. Hoare & Co. claims there are between 12.5 million and 25 million ounces of the shiny stuff. Furlong, a burly 58-year-old, unfurls from a red bandanna two vials containing about one-quarter ounce each of yellow and black powder. "It's like a toy box, full of wonderful toys," he says with a grin.
Some big fund operators have been eager to play. Capital Research & Management Co., which has $150 billion under management through American Funds, owns almost 12% of International Precious Metals. Midas Fund, the London-based precious metals fund, has picked up 200,000 shares. IPM's stock is trading on Nasdaq at 815/16, more than double its price one year ago, bringing its market capitalization to almost $160 million.
Enthusiasts would do well to check out Furlong's credentials. In 1959 he dropped out of Central Washington College of Education in Ellensburg, Wash. and left for Australia. There he worked as a field hand for a geophysical consulting firm.
In the late 1970s, Furlong says, he discovered and developed one of Australia's biggest gold deposits, the Paddington Mine, formerly owned by Pancontinental Ltd. and now by Sydney-based Renison Goldfields Consolidated Ltd. But that's not what others say. Paddington's former chief geologist, Ian Robertson, says Furlong was just a field technician with no expertise in geology. Other ex-Pancontinental executives confirm this.;
This much is true: While at Pancontinental, Furlong met Alan (Oily) Doyle, a geologist. Doyle has been behind several Australian mining exploration companies that eventually faded after announcing big discoveries and ramping up their stock prices.
In the early 1990s Furlong returned to the U.S. He discovered not gold but a shell company called International Platinum Corp., trading on the Toronto Stock Exchange. The company had been exploring for platinum in North America, and its chief executive had recently died.
Furlong and Doyle took over International Platinum, and in 1993, at a gold conference in Las Vegas, met Dale Runyon, who calls himself a business consultant. "This guy came up to me and said, 'Have I got a proposition for you,'" recalls Furlong. This was the Arizona property named BRX.
Doyle raised $27 million through private placements with the help of T. Hoare &Co. He and Furlong used the money to buy the find from Runyon. In gushing press releases, Furlong quickly announced there was gold and platinum in minable quantities at BRX. That caught the attention of Toronto Stock Exchange officials, who requested that a Toronto mining engineering firm verify International Platinum's samples. Negative. The exchange asked the Arizona Department of Mines &Mineral Resources to check, too. Again, no worthwhile ore.
The investigations involved a so-called fire assay. This is a standard industry technique for analyzing the amount of gold in a soil sample. "The fire assay has been the tried-and-tested method for assaying gold and platinum for many years," says Graham Farquharson, owner of Strathcona Mineral Services, the mining consulting firm that blew the lid off Bre-X Minerals. "There's no particular geology that's too difficult to handle through a fire assay."
With the negative results from the fire assay, the Toronto Exchange suspended the shares and, later in 1994, delisted them. But you can't keep a good promoter down. Alan Doyle came on officially as chairman, and the company subsequently changed its name to International Precious Metals.
Paul Mentzer, vice president of IPM's technical services, argues: "There is not a single fire assay recipe that works on every material." He says IPM has developed its own leaching method to assay and recover gold.
With such gobbledygook, Furlong is out there with his Internet site (www.ipmcf.com), where he breathlessly chronicles progress.
Investors, be wary. |
