InvestigativeMEDIA’s 24-minute video reveals the deceptive business tactics of Augusta Resource Corporation’s top executives when they operated a gold mine in Sardinia, Italy between 2003 and 2007.
Augusta Resource owns the Rosemont Copper Company, which is seeking government permits to build a mile-wide, half-mile deep copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
Six of Augusta’s current and former directors also served on the board of Sargold Resource Corporation between 2003 and 2007. Sargold owned a gold mine near the small farming village of Furtei in southern Sardinia.
The common Sargold and Augusta directors include: Augusta Chairman Richard Warke, Augusta President and CEO Gil Clausen, and directors Donald B. Clark, Robert P. Wares and Christopher M. H. Jennings. Former Augusta director Michael A. Steeves also served on the Sargold board. (Clark resigned from the Augusta board on Nov. 12, 2012.)
“Cyanide Beach” documents Sargold’s business history in Sardinia including:
• Failing to pay local contractors, forcing vendors to obtain court judgments;
• Misspending a $787,000 Sardinian government loan that was supposed to be used to develop an underground mine;
• Issuing misleading press releases to investors, including a release that overstated gold reserves in Furtei forcing the Toronto Venture Stock Exchange to require the company to retract the projection;
• Using its obligation to implement environmental restoration of the Furtei gold mine as leverage with Sardinian government officials in a failed attempt to gain gold mining rights elsewhere in Sardinia;
• Failing to disclose Mr. Warke’s personal bankruptcy in regulatory filings between 2003 and 2005;
• Failing to disclose to investors in annual proxy reports that a Cayman Islands hedge fund controlled more than 10 percent of Sargold’s stock between 2005 and 2007.
Sargold’s conduct in Sardinia left a lasting impression on its former business partners. Franco Cherchi, a former president of Sargold’s Gold Mines of Sardinia subsidiary, reported directly to Mr. Warke and is interviewed in his office in Iglesias, Sardinia.
When asked if Mr. Warke was a man of his word, Cherchi replied with smile: “When it’s no longer convenient for him, he withdraws the promise.”
Additional information on Sargold and a detailed business history of Mr. Warke, and his long time associate, Mr. Clark, is available here.© Copyright 2012 John Dougherty, All rights Reserved. Written For: Investigative MEDIA