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Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: The Fix who wrote (6573)	6/28/1998 2:20:00 PM
From: Mr Metals	Read Replies (1) \| Respond to of 26850

Saturday, June 27, 1998 Tampering scandal hits Mongolia Gold By PAUL BAGNELL Mining Reporter The Financial Post A sample tampering scandal has marred the prospects of another Canadian gold mining company. An independent report on an exploration site operated by Mongolia Gold Resources Ltd. said two sets of earth samples -- which showed high gold values and caused the company's shares to rise -- probably did not come from the site. Rather, said Vancouver mining engineer Gary Hawthorn, the samples appear to have been taken from small mining areas near Mongolia Gold's 49%-owned property in Mongolia, then substituted for the real samples before assaying took place at laboratories in Mongolia and Canada. Hawthorn's report was published on April 28 but attracted little attention probably because the company's shares never hit the levels seen in other recent gold fraud cases. Shares of Vancouver-based Mongolia Gold (MGR/VSE) climbed to $1.60 from $1.04 in the two weeks after March 3, 1997, when the company reported a "large gold-in-soil geochemical anomaly" on the Bumbat West property. On April 17, 1997, Mongolia Gold announced further "encouraging" but "preliminary" results from a second round of surface tests. On July 4, it said it was unable to duplicate the impressive results of the two earlier sampling efforts. In his report, Hawthorn said the most likely explanation was a "plan to replace some of the original samples" with gold from the nearby mining properties. Dave Webb, Mongolia Gold's president, said Friday the company's staff and sample security measures at the site met industry standards during the period in question. Hawthorn said stricter regulations introduced by the Vancouver Stock Exchange in November would have brought the deception to light earlier. His report said it was "unlikely" Canadian company officials were involved in the scheme. But one senior employee refused requests to make a statement on the affair and other "senior Mongolian" employees showed a lack of interest in having local police called in, he added. Angela Huxham, VSE's director of surveillance, said the exchange's probe into insider trading at Mongolia Gold was "inconclusive" and the VSE was satisfied with the company's record of disclosure on the matter. MM