By: Oldminer
Reply To: None
Thursday, 17 Feb 2000 at 10:34 AM EST
Post # of 3131
SEC vs Terry Turner, Day 3
On February 16, 2000, in Federal Court, Denver, Colorado, the third day of the SEC's prosecution of Terry Turner
transpired. Judge Zita L. Weinshienk was presiding.
I was there. These are my impressions.
The day began with Guido Paravicini on the stand. This was a continuation of the direct examination by the defense that
began on Tuesday. The questions were posed by Mary Corporon in behalf of Terry Turner.
Paravicini testified that as his report neared conclusion that he began to receive numerous phone calls from the U.S.
inquiring of the results. These calls were not from GE and were disrupting and disturbing. He felt great pressure and
feared that the results might leak out prematurely.
Paravicini addressed the Mullin criticisms and explained step by step the necessity of his procedures. He explained to the
court "grab samples", "sample splitting", "fire assays", etc.
When asked the size of the area upon which he had declared a reserve, he answered, "10 to 20 hectares", explaining that
a hectare was about two and one-half acres.
Paravicini testified that he kept Terry Turner informed of his progress. Before the May 22nd press release, he met with
Terry Turner in La Paz, Bolivia in early and late May, spending two to three days, each time, discussing his report in
Spanish. They were discussing the details of how the field studies were conducted and the results.
When asked how much time Terry Turner had spent with him while the field studies were in progress, he answered, "Many
visits, two or three days at a time."
The cross examination was conducted by SEC attorney, Robert Fusfield.
His first question concerned the fact that this area of Bolivia had been mined a thousand years. Then he asked, "Gold
removed is not available, is it?" Paravicini agreed.
Fusfield questioned the number of hours spent with TT each time they met. Paravicini answered, "Eight to twelve hours."
Fusfield inquired about the delayed lab results that were submitted at the very end. Did they involve Chaco or Cangalli?
Paravicini responded, "No, we already had results for Chaco and Cangalli."
Fusfield proceeded to ask a series of questions about appendix 6 concerning Chaco and Cangalli, and whether the
Spanish calculations were discussed with TT. Paravicini, though frustrated, continued to patiently explain, again and
again, his first answer, that he and TT had thoroughly discussed these facts in Bolivia in early May.
Fusfield asked, "The only place you found reserves were in Chaco and Cangalli?" "Yes," Paravicini responded.
"You did discuss Chaco and Cangalli with Terry Turner? Did he understand?" Response: "Yes"
Following were many questions, designed to confuse and entrap Paravicini. Matters pertaining to oversized and
undersized samples, recalculations, etc. Guido, valiantly and steadfastly, remained unshaken in his testimony. For a man
speaking in a second language, one could not help but be impressed that Paravicini was courageously telling the absolute
truth.
Fusfield asked Paravicini to locate on his map were he had taken a 12 ounce sample of gold. This could not be found on
the surface map of sample locations. After a brief break, Paravicini returned to the stand to testify that this was a sample
taken by Albert Trites from the underground mine shaft. Paravicini affirmed that the Trites report had been included in his
report.
Following were a series of questions from the deposition the SEC had taken June 17, 1998, about faxes and telephone
conversations with TT.
Asked if he were being paid. Answer: "150" a day.
Asked if GE owned a Knelson concentrator. Answer: "Yes".
About the size of a pineapple? Answer: "Yes".
Asked if GE had ever profitably mined in Cangalli. Answer: "The are not yet in the mining stage."
Following were questions about bulk samples, measured in tons, and whether these results were needed to validate his
findings. Answer: "Not validate, it would confirm." You know the results in advance? "Yes". Are you a psychic? "No, I know
well that place."
Were some samples taken from pay streaks? "Yes".
ReDirect:
Is it valid to test a pay streak in a mineral examination? "Yes". If you fail to test a pay streak would it affect the accuracy of
your report? "Yes".
What is the Trites report included in your report? "A report of work done by another geologist, Albert Trites. His results
were close to mine."
Do people in your profession refer to other geological reports like the Trites report, when testing the same area? "Yes"
You were the second geologist to make a report of this prospect to GE? "Yes. Trites was the first."
What portion of all the samples were recalculated? "3% or so."
Following this Fusfield tried again to demonstrate, by his interpretation, that more than 3% of the samples were
recalcutated. Fusfield's count included Trites samples, which Paravacini did not recalculate.
The next witness for the defense was Dr. Ronald Atwood. His impressive credentials were presented to the court and he
was recognized as an expert witness.
Dr. Atwood was questioned by John Henry Schlie, another highly qualified attorney representing Terry Turner.
Have you visited the GE prospect in Bolivia? "Six or seven times for periods of a day or two to two to three weeks."
Is Cangalli a classic placer? "No, it is unique. In size it is as deep as the Grand Canyon and as large as Manhattan."
"It is so large that it does not fit typical river placers. It resembles alluvial or hardrock deposits. . .In places it is 8000 feet
thick."
Did you have contact with TT? "We talked an average of seven times a week since 1994. How things should be
processed, sampled, etc."
Did TT consult you about hiring Paravicini? "Yes. I highly recommended it."
Did you discuss Paravicini's work with TT? "Yes". Who was calling the shots? "Mr. Paravicini". Why? "His qualifications
and because he was the man on the site."
Following was testimony of the appropriateness of Paravicini's techniques. It was clear he endorsed what was done.
Asked if he would rely on Paravicini's report for reserves, he responded that he would. Asked if this could be described as
a "world class reserve" he answered by drawing on this experiences at Newmont. Then he said, "If you want to use the
term 'world class' that probably would be appropriate."
Atwood testified that he had advised TT that it was his fiduciary responsibility to release the Paravicini report as soon as
possible.
He testified that Paravicini's numbers were not surprising. He had read the Trites report which estimated 4.9 million
ounces in Cangalli and knew the long history of gold mined in the area.
He testified that he recommended that TT and GE rely on the findings of Paravicini. "These are the best they have."
He was asked, in your experience, is it unusual to have a field geologist recalculate etimates? Answer: "No". He illustrated
by saying, "Take five geologists to a site like this and there would be five different opinions. And, a good argument would
ensue."
Is it reasonable to believe that there are six million ounces of gold in Cangalli and Chaco? Answer: "Yes, very reasonable
and very conservative."
At this point, Atwood was asked by the judge if the gold was accessable and if it could be profitably mined? His answer
and emphatic, "Yes". It will cost in the range of $100 an ounce to mine the gold in Chaco. Is the gold accessable? "Yes,
several million ounces have already been removed."
Do the Chaco and Cangalli areas have world class gold? "You can call it world class."
Cross by Fusfield:
Do you own GE stock? "No". Do you have options to buy stock? "No".
What is the difference in proven reserves and estimated reserves? "All reserves are estimates. No one is ever certain
how much gold is in a deposit. It is always an estimate. It must be mined to determine the final amount."
Does the fact that GE has not been profitable affect the reserves? "No".
Is Behre Dolbear competent? "Yes". Were they asked to calculate reserves? "No". Did the BD report support the viewed
value of Chaco? "Yes"
"BD was to confirm that it was a gold bearing deposit and would have enough mineralization to support the conclusions of
Paravicini. . . BD's conclusions do not contradict Paravicini. It is a large gold deposit."
Next defense witness: Mack Delozier.
Testified to working for GE in La Paz. Was aware of Guido's work. Tesified to the many telephone inquiries received
before release of report. Testified that TT arrived in La Paz office May 9, 1998, and spent hours discussing in detail the
report with Paravicini. Testified that he had found few Americans more fluent in Spanish than TT. Testified that Paravicini
is a highly recommended geologist.
SEC cross: "No questions".
The trial is on schedule and ought to end with a verdict on Thursday.
The Oldminer |
