Barkerville Gold served with a proposed class action lawsuit

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Barkerville Gold Mines Ltd. [BGM-TSXV] announced that it had been served with a proposed class action lawsuit that has been commenced in the Ontario Superior Court of Justice relating to an August 12, 2012, technical report prepared by Peter T. George, P. Geo, concerning a mineral resource estimate for the Cariboo Gold Project. The Notice of Action also names the company’s former President and CEO, James Francis Callaghan, former CFO, Minaz Dhanani, the author of the Technical Report Peter T. George and his consulting company, Geoex Limited.

The representative plaintiff is requesting various orders and declarations in the Notice of Action, including $9,900,000 in damages, based on alleged misrepresentations in violation of Canadian securities regulatory requirements relating to the mineral resource estimate that was announced on June 28, 2012, and incorporated into various disclosure documents, including but not limited to, the Technical Report.

Barkerville Gold Mines stated that the company has retained counsel and intends to vigorously defend its interest and protect its rights.

In the summer of 2012, statements from management at Barkerville Gold Mines that the Cow Mountain Project had an indicated resource of more than 10.6 million ounces gold with the potential for 90 million ounces gold stunned the mining community. The British Columbia Securities Commission (BCSC) had concerns about how the data was compiled. In August 2012, The BCSC issued a cease trade order (CTO) as a result of the following (according to a July 15, 2013 Barkerville Gold news release):

  • On June 28, 2012, Barkerville issued a news release that included first time disclosure of a change in mineral resources at Cow Mountain. The increase in the mineral resources was a material change in the affairs of Barkerville.
  • Pursuant to section 4.12(1)(j)(ii) of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), Barkerville was required to file a technical report for the Cariboo Gold Property, supporting the first time disclosure of the change in mineral resources at Cow Mountain.
  • On August 13, 2012, Barkerville filed a technical report, dated August 13, 2012, on the Cariboo Gold Property. The Report was not prepared in the required form.

Reports were refiled and the cease trade order was revoked effective July 15, 2013. On, June 4, 2014, Barkerville Gold announced that mining operations recommenced at its Bonanza Ledge Mine and QR mill facility near the towns of Wells and Quesnel in central BC.” A few weeks later, on July 24, Barkerville Gold poured its first gold brick from the Bonanza Ledge Mine. Since then the company has restructured and forged ahead.

In January, 2016 The Northern Miner reported that, “the Association of Professional Engineers and Geoscientists of British Columbia has reached a consent order with Peter Thomas George in which he has agreed to pay a fine of $15,000 and pay $20,000 towards APEGBC’s legal costs for a disciplinary proceeding concerning a technical report that he wrote as the designated Qualified Person in August 2012 about Barkerville Gold Mines’ Cow Mountain deposit…” George admitted to all the charges; his license was not revoked, but he must partner with other professional geoscientists to produce mineral resource or reserve estimates.

In December of 2015, Barkerville Gold Mines announced that it had identified a new, high-grade, vein trend at the Cariboo Gold Project. Early this year, the company reported positive drill results from a Phase II drilling program at the Cariboo Gold Project. Highlights include:

  • BGM-15-145: 18.95 g/t (0.55 oz/t) Au over 4.40 metres including 37.82 g/t (1.10 oz/t) Au over 2.00 metres including 65.82 g/t (1.92 oz/t) Au over 1.00 metres
  • BGM-15-148: 120.43 g/t (3.51 oz/t) Au over 2.50 metres including 332.16 g/t (9.69 oz/t) Au over 0.90 metres
  • BGM-15-149: 11.70 g/t (0.34 oz/t) Au over 5.30 metres including 57.33 g/t (1.67 oz/t) Au over 1.00 metres
  • BGM-15-151: 21.06 g/t (0.61 oz/t) Au over 2.00 metres including 25.96 g/t (0.76 oz/t) Au over 1.00 metres and 16.15 g/t (0.47 oz/t) Au over 1.00 metres
  • BGM-15-159: 28.99 g/t (0.85 oz/t) Au over 2.55 metres including 13.95 g/t (0.41 oz/t) Au over 1.15 metres and 41.34 g/t (1.21 oz/t) Au over 1.40 metres
  • BGM-15-160: 10.06 g/t (0.29 oz/t) Au over 19.40 metres including 16.12 g/t (0.47 oz/t) Au over 9.70 metres including 33.18 g/t (0.97 oz/t) Au over 2.70 metres and 15.40 g/t (0.45 oz/t) Au over 3.00 metres
  • BGM-15-162: 21.49 g/t (0.63 oz/t) Au over 4.00 metres including 27.80 g/t (0.81 oz/t) Au over 3.00 metres including 44.50 g/t (1.30 oz/t) Au over 1.50 metres
  • BGM-15-163: 43.48 g/t (1.27 oz/t) Au over 7.95 metres including 54.88 g/t (1.60 oz/t) Au over 5.95 metres including 209.33 g/t (6.11 oz/t) Au over 1.00 metres

Note: Reported core lengths represent 60-90% true widths.

On April 23, 2015, the company announced the completion of the Phase I test mining program at the Bonanza Ledge Mine with 91,234 tonnes processed at a head grade of 8.66 g/t gold, yielding 23,726 oz gold at a 93.4% recovery.

Obviously, the Barkerville story is far from over.


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