Tri-Con's role
While SEC filings also indicate that Silverado has no employees, and Anselmo told WND that he does not take a salary from Silverado, these relatively high research and development costs for the "unreportable segment" are billed through Tri-Con Mining, Ltd., a private company controlled by Anselmo.
Under the current contract dated January 1997, work is charged at cost plus 15 percent for operations and cost plus 25 percent for exploration and development. Cost includes a 15 percent charge for office overhead, even though Tri-Con uses Silverado's offices.
Silverado has significant office overhead. The most recent 10Q puts office expenses at $141,193.
In addition, "management services from related party" were at $147,055, and "general exploration" was at $82,184. The SEC filing also states, "At August 31, 2002, the Company had advanced $776,521 to the Tri-Con Mining Group for exploration, development and administration services to be performed during the current fiscal year on behalf of the Company."
Stock promotion
Another area of financial focus for the company is paid advertorials and promotion programs. Even in periods of low gold sales, Silverado consistently has shown to spend tens of thousands of dollars in promotional advertorials – as much as $45,000 per newsletter campaign. Per the company's latest 10Q filing, Silverado spent $118,700 on advertising and promotions, and had revenue from gold sales of $971. For the same period, the company spent $1,019,168 in "consulting fees."
Advertorials have appeared in such stock promotional venues as Diablo Alert, Penny Picks, Wall Street Universe, the Bull & Bear Financial Report, CEOCast, Equity Alert, Emerging Company Report and International Economist J. Wesley Savage and his Princeton Research, Inc. group. Positive "press" from the latter on behalf of Silverado appeared in March 1997" and May 1997.
No indication is given as to whether Savage received compensation for his reports. Two of those stock-touting companies used by Silverado – Emerging Company Report and Princeton Research – were named in the SEC's first Internet securities fraud sweep in 1998.
One unpaid stock report, Stock Patrol, noted: "If Silverado is paying these various online promoters, investors may question its allocation of resources. … After all, despite a thirty year operating history, Silverado's mining operations are not profitable, its liquid assets are meager, and its revenues are sparse. Could available funds be put to more productive use – like building the fuel production facility?" |
