Augusta Resource’s top officers have history of bankruptcies, cease trade orders and stock exchange delistings

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Augusta Resource Corporation Chairman Richard Warke and board member Donald B. Clark have been business partners for more than two decades.

Warke, a venture stock promoter, and Clark, a banker, have served on the board of directors of several Vancouver, B.C.-based public companies.

From their offices in the Terminal City Tower overlooking downtown Vancouver’s waterfront, Warke and Clark now manage several speculative mining companies including Augusta Resource Corporation, Wildcat Silver Corporation and Riva Gold Corporation.

Augusta owns the Rosemont Copper Company, which is seeking permits to build an open pit copper mine in the Santa Rita Mountains south of Tucson. Wildcat Silver is seeking government permits to construct a silver mine near Patagonia, Ariz. Riva Gold has mining claims in Guyana.

Richard Warke

Their business partnership began in 1991, when both men served on the board of First Western Metals. First Western ran into financial difficulties and was issued cease trade orders by Canadian securities regulators in 1991 and 1992. First Western later changed its name to Augusta Metals Corp. before acquiring Cybercom, Inc.

Warke and Clark were on the Cybercom board when Canadian regulators issued the education software company a cease trade order in 2002 for failing to file annual financial statements. The CTO was never lifted.

Warke and Clark also served on the board of directors of West Coast Plywood Company and were corporate officers when the company filed for bankruptcy in July 1995.

Wark and Clark, along with four other current and former board members of Augusta Resource, served on the board of Sargold Resource Corporation. Sargold operated an open-pit gold mine in Sardinia. See related story and documentary.

Clark also has an extensive background on the board of directors of several U.S. corporations, most notably, Pasadena, Calif.-based Conversion Industries, Inc.

Clark resigned from the Conversion board of directors in October 1994, 12 days after the American Stock Exchange announced its intention to delist Conversion for alleged trading irregularities.

Donald Clark

Conversion reached a settlement agreement with the U.S. Securities and Exchange Commission in March 1995 and agreed to be delisted from the AMEX. Conversion filed bankruptcy in May 1995.

Warke’s business history includes a 1989 insider trading settlement agreement with a British Columbia Securities Commission and a personal bankruptcy proposal filed in September 1998 and satisfied in November 2002.

Warke is listed on the British Columbia Securities Commission website under the commission’s “Disciplined Persons and Investment Caution” section.

The corporate and personal bankruptcies, stock exchange delistings and cease trade orders described above were not disclosed in some subsequent filings by public companies that included Warke and Clark as directors. Among these companies is Augusta Resource.

Warke’s personal bankruptcy was frequently omitted from corporate disclosures that require personal bankruptcies to be reported for 10 years. Augusta Resource, for example, did not disclose Warke’s bankruptcy filing even as the case was ongoing between Sept. 15, 1998 and Nov. 22, 2002.

Augusta Resource did not disclose Warke’s bankruptcy until April 6, 2006, regulatory filings indicate. Augusta Resource continued to disclose Warke’s bankruptcy in 2007 and 2008.

The company, as well as other public companies that include Warke and Clark on the board of directors, have not disclosed the bankruptcy since October 2008, except on one occasion.

Ventana Gold Corporation disclosed the bankruptcy on Oct. 31, 2008, which is more than 10 years after Warke filed the petition on Sept. 15, 1998.

The company stated: “The Trustee acting in the Proposal certified the Proposal as fully performed on November 21, 2002 and he was thereby discharged.”

British Columbia Securities Commission Deputy Director of Finance Andrew Richardson stated in a Dec. 15, 2010 telephone interview that personal bankruptcy proceedings must be reported on corporate disclosures for 10 years from the date of filing the initial case and continuing through the date the bankruptcy is concluded. If a case takes four years to conclude, the effective disclosure period is 14 years, he said.

In early September, BCSC spokesman Richard Gilhooley stated in an email that the 10-year disclosure period is not tied to the conclusion date of a bankruptcy. Gilhooley said there are certain events, however, that can trigger the initiation of the 10-year disclosure period beyond the initial filing date of the bankruptcy.

Gilhooley said the Commission does not have a “definitive answer” of whether Warke’s October 2002 bankruptcy default is a triggering event that requires disclosure of the bankruptcy for 10 years from the default date.

InvestigativeMEDIA has included all known examples of companies failing to disclose Warke’s bankruptcy from 2000 through 2012 in a written and video timeline of the business history of Augusta Resource’s longtime business partners. [Read more…]

Former Rosemont Mine investor poised to gross $400 million on Arizona Mining Inc. sale

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(Reprinted with permission from Rosemontminetruth.com)

Richard Warke, the former top executive of Augusta Resource Corp. which sold the proposed Rosemont copper project to Hudbay Minerals in 2014, stands to gross US$409 million in connection with the sale of another company with a proposed mining project in southeastern Arizona.

Richard Warke

Australia-based South32 has offered US$1.3 billion cash to purchase Arizona Mining Inc.’s Hermosa mine project six miles south of Patagonia. The Hermosa Project comprises the zinc-lead-silver Taylor deposit and the zinc-manganese-silver Central deposit.

South32 is Australia’s third largest mining company and already held a 17 percent share in Arizona Mining prior to making the June 15 offer. Arizona Mining’s board of directors unanimously recommended shareholders approve the sale. Warke is Arizona Mining’s executive chairman.

South32’s offer of C$6.20 a share was about 50 percent higher than Arizona Mining’s June 15 closing price on the Toronto Stock Exchange. South32’s shareholders’ approval is not required and the deal is expected to close in September, according at a joint press release issued by the two companies.

Warke controls 88 million shares of Arizona Mining according to the company’s most recent Management Information Circular filed with Canadian securities regulators. The huge windfall comes 20 years after Warke filed for personal bankruptcy in Vancouver, British Colombia during a period in which he was engulfed in financial problems including a corporate bankruptcy and several cease trade orders issued by Canadian regulators.

Warke failed to disclose the personal and corporate bankruptcies and cease trade orders in subsequent regulatory filings spanning nearly a decade, according to a complaint filed by Save the Scenic Santa Ritas, a Tucson-based conservation group, with the British Columbia Securities Commission (BCSC) and the U.S. Securities and Exchange Commission .

Warke’s personal bankruptcy filing came 9 years after he signed a settlement agreement with the BCSC on an insider trading violation. As a result of the settlement agreement, Warke remains on the BCSC website under the warning “Disciplined Persons and Investment Caution.[Read more…]

InvestigativeMEDIA, MiningWatch ask U.S. and Canadian ambassadors to intervene with Peru over detentions

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RIMROCK, AZ–InvestigativeMEDIA and MiningWatch, Canada, today sent a joint letter to the U.S. and Canadian ambassadors to Peru asking them to seek information from Peruvian officials about last April’s detention of John Dougherty and Jen Moore in Cusco, Peru.

Mr. Dougherty is the owner and editor of InvestigativeMEDIA and Ms. Moore is the Latin American Coordinator for Ottawa-based MiningWatch, Canada.

Peruvian National Police and immigration authorities detained Mr. Dougherty and Ms. Moore on the street after the screening of InvestigativeMEDIA’s documentary “Flin Flon Flim Flam” at Cusco’s Municipal Cultural Center on Friday, April 21. The film had been dubbed into Spanish and Quechua.

The film documents Toronto-based Hudbay Minerals’ worldwide operations and highlights its deployment of the Peruvian National Police to beat and teargas protesters near its Constancia open-pit copper mine near Uchucarco, Peru in November 2014.

Hudbay confirmed in May that it continues to have a contract with the Peruvian National Police to provide security services.

Mr. Dougherty and Ms. Moore were taken to police headquarters and held for more than four hours and pressured to sign statements. Mr. Dougherty refused to sign any documents without an English-speaking attorney present. There was no warrant issued for their arrest.

The next day, the Peruvian Interior Ministry issued an inflammatory press release (English translation) accusing Mr. Dougherty and Ms. Moore of inciting civil disturbance that is punishable by expulsion from Peru for up to 15 years. The press release noted that Hudbay has all permits to operate in Peru.

Prior to their arrival in Peru, anonymous articles published in a Cuscso newspaper alleged that Mr. Dougherty and Ms. Moore were preparing “to ambush” Hudbay. Subsequent articles accused the two of inciting violence after several Hudbay copper concentrate transport trucks caught on fire.

“We believe the stigmatization in the press and by a public authority, along with the police harassment, illegal and arbitrary detention and our ongoing legal prosecution is a result of the privatization of the public security apparatus in Peru and about state authorities and Hudbay Minerals trying to exert control over what information communities living around the company’s Constancia mine have access to,” the joint letter to the ambassadors states.

The letter requests the ambassadors to ask the following questions to Peruvian Ministry of Foreign Affairs and the Ministry of Justice and Human Rights:

  • Why were Mr. Dougherty and Ms. Moore subjected to this sort of surveillance, harassment and criminalization?
  • Why were police tracking their movements from April 18 to 20?
  • Why did the police fail to duly notify Mr. Dougherty and Ms. Moore and allow them the appropriate time to respond to any concerns about their migratory status, if that was indeed the concern, and instead illegally and arbitrarily detain them for four hours on April 21?
  • On what basis did the Interior Ministry publicly accuse Mr. Dougherty and Ms. Moore, on April 22, of having incited local campesino populations to violence and demonize them as a threat to public order, internal order and even national security.

Mr. Dougherty and Ms. Moore left Peru prior to a hearing that was scheduled for Monday, April 24. Both are currently represented by separate legal counsel. Police released an April 22 initial report that documented the screening of the film in several communities near Hudbay’s  Constancia open-pit copper mine. No other evidence has been released as of June 20.

Hudbay Minerals is currently seeking a federal Clean Water Act permit from the U.S. Army Corps of Engineers for its proposed $1.9 billion Rosemont open-pit copper mine planned for the Santa Rita Mountains on the Coronado National Forest southeast of Tucson, Ariz.

Canada’s National Observer reports on Peru detention of Dougherty and Moore

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Canada’s National Observer published an excellent story Friday, May 12, about InvestigativeMEDIA’s owner John Dougherty’s recent detention in Peru along with Mining Watch, Canada’s Jen Moore. Here’s the link: http://www.nationalobserver.com/2017/05/12/news/detained-and-accused-peru-canadian-activist-suspects-foul-play

CFAX radio in Victoria, Canada interviews Dougherty, Moore on Peru detention

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Mark Brennae of CFAX radio in Victoria, Canada interviewed InvestigativeMEDIA’s John Dougherty and Jen Moore, Latin America program coordinator for Ottawa-based MiningWatch, Canada on Wednesday, May 10 about their April 21 detention by the Peruvian National Police and Peruvian immigration authorities after a Cusco, Peru screening of Dougherty’s documentary “Flin Flon Flim Flam” on the worldwide operations of Hudbay Minerals.

The 30-minute interview can be heard here:

http://www.iheartradio.ca/cfax-1070/shows/the-drive-with-mark-brennae-1.1821472