Rick,
You sound like you've been burned before.
This situation isn't a salt job or false assay results. It's the issue of three inter-related companies engaging in non-arms length transactions involving monies. GMD loaned some monies to LMX and Farrell Financial(some flowed through to LMX) so that LMX could continues to drill for oil in some place called Newfoundland(a Canadian province) and operate some small mines in Mexico, as well as continue exploration there. GMD has successfully raised financing for it's own projects but LMX has not. Likely under pressure from somewhere, the GMD gang thought it was OK for LMX to raise their required financing from them. They probably thought LMX could repay the loans quickly from the operating mines in Mexico.
It doesn't appear that Farrell embezzled $3,000,000 as the LMX financial statements as at August 31, 1997 report, Note 6. Loans Payable to GMD and Farrell totalling $1,826,207. Monies after this date were also loaned to loaned to LMX but would be reported on their future financial statements for that period. The sale of GMD and LMX shares during the period in question will be reviewed by the VSE to determine if there were any illegal trades occurring.
In another time, LMX might have been able to raise financing for their project but in 1997 its was difficult for most juniors. I don't agree that GMD loaned the monies to Farrell Financial or LMX in the way they did. They (GMD) probably knew the VSE would block it so they 'overlooked' reporting it on a 'timely' basis hoping that they might get a 'slap on the wrist' when they did. Unfortunately for them, the VSE thought that some LMX/GMD directors deserved a much more severe punishment such as forced resignations, public humiliation, and possible other penalties.
Ultimately, I think that GMD is in better hands with Webb and Hess. At least these guys are actual mining people, not promoters like some of the others. Their prospects for 1998 are still valid. The Royce Properties are a diamond play and diamonds are the flavour of the year up in the north. A substantial multi-million dollar exploration program was planned for 1998 and funds exist to finance the program. Millions have been spent on drilling and infilling the Discovery Mine, and all of it done by knowledgeable, competent geologists and mining people (remember that Farrell was the promoter, not the geologist). The former were not going to risk their reputation putting numbers together that weren't truthful in light of the Bre-X and GNU debacles last year. Rumours currently exist that they are close to completing their reserve estimate, which will be around the 2 million mark. Gold is not in vogue these days, so this may not help share price anyway, but it will be a number that some majors might be interested in as they scout around to buy up juniors.
If Mr. Metals estimate of opening at .05cents is accurate (which it most certainly will not be), then I'm going in for all I can get. I'm confident in the mining guys, the projects, the financing, and the VSE and will be hoping to pick up some devalued stock when some people on this thread and elsewhere sell-off when trading re-opens. Cal
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