No, there was no insider trading scam on Kidd Creek. The SEC alleged that insiders, George Bush, Holyk, Darke, Darke's sister and others had profited by INVESTING in Texas Gulf before the PUBLIC knew to invest. The RULES of the SEC at the time for insiders were that one could SPECULATE on share value of the company but not trade on INVESTMENT GRADE information. The SEC took Darke and incidentally TG to court. One one drill hole the famous hole 64 (in 1964 by co-incidence) of the TG program in Timmins did Darke know before he had assayed the hole, and before he knew of any deleterious elements in the core, or its grinding release size, or the geometry of the deposit, or what other holes or assays may reveal -- that THERE WAS A MINE THERE. The SEC in their geological wisdom, the benefit of 20-20 hindsight, and get this, CIA provided wiretaps, (Bush?) which had to be placed only 24 hours after Holyk was told about the core, that Darke KNEW he was sitting on a mine.
His defense was it was reasoble to assume that no geologist would assume a mine from one hole no matter how spectacular. You often may not know which way in the deposit you are drilling for instance. That is an iron clad defense normally. You have to remember that Darke was half blind, had estimated the value in the core by holding it 2 inches from his eyes without his glasses on, and visually identifying the minerals and their amount. (All 597 feet of intersection. I saw the hand notes. It was quite a job.) He did not wait for assays. Was this speculation or INVESTMENT? He also said in his defense that TG had quite a few assets, among them "options" on two lead zinc deposits in the Territories, which late becames Polaris and Nanisivik mines, some property near Freeport in Indonesia (before it became the worlds richest mine and a 50,000,000 ton copper zinc deposit in New Brunswick., which they had later found out was too fine grained to profitably mill. He maintained that he was speculating on the one hole, not investing as per the rules. You can do this. You could do this. But if you drilled and went pre-feasiibility and did not tell, and then bought, well, that was verboten. Everybody knew that. The question is, what is and was material change in the company affairs? One hole, no matter how good? Was it a guaranteed mine? Guaranteed to drive stock? TG was pretty expensive stock at the time.
Darke lost his case and had to pay back 500,000 dollars in SEC alleged insider profits. So did his sister pay back some. (It is amusing that Darke swore that he never informed his sister of the find. He told her that TG was a good buy for many reasons, when asked over Christmas dinner, I believe. She got the hint. The SEC was less credulous.) What is significant is, although every other figure in TG made money on the stock too, Darke the little guy, had to pay back the money. Bush, Holyk and other luminaries on the TG board kept their gains, as they could say they did not know. It was true that in fact the news was kept very close to the vest.
Ken Darke died in Timmins in 1999. He is credited with recommending to drill hole 64 the hole that found the largest richest copper zinc mine in history. A hole that revitalized the Canadian mining industry at the time.
I talked to Bill James the other day and told him that before Darke died he showed me a geochem map he had made in 1963. He asked me what I thought of it. I had done quite a bit of float train following for SMDC before but Darke had not made it a career. I said is was most interesting. The arc of the float train had a focus that pointed directly at Kidd Creek. That was obvious and from the book. We perused down the map a ways. What did he think of this second identical arc? It would point to another deposit of the same nature, we could surmise, in another location. Naw. It cannot be. But it must. "Well" he said, "I always thought there were two Kidd Creeks." Why was that I asked? "Because geologically Kidd Creek is overturned. It is the top half of a deposit that is actually been bit in two. Its bottom half must be out there as it would be less eroded usually", Darke said.
Well maybe. And conveniently with a second float train pointing right at it. Maybe.
I was wandering in the Timmins camp when a prospector showed me some float he had found in that region. It was very decrepitated massive chalco. I had seen Kidd float. This was not the same stuff. It was in the region of the 2nd float train I had referred to. It looked from my experience that it could not have travelled far. Its accessory mineralization was of a very frail type and easily eroded. It could not have come over six miles for sure. It had a character that I knew would preclude it being drilled as the nature of its anomaly due to its accessory minerals would make it look like a graphitic sediment. Darke had told me they would never drill or continue to explore these type of sediments either by the nature of the map anomaly or its ground character. This was the second time I had seen mated copper bands and sediments in the KL-Timmins camps. Here was the proof that this is not always the right thing to do to downgrade sedimentary association. SEDEX and volcanigenic deposits could co-exist in the same environment and perhaps the same deposit. I looked up ice. The right rocks. the right, anomalies, and the right distance to them. One major problem. NO money to buy land. No money to operate.
EC<:-} |
