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

A Sardinian gold mine unearths the deceptive business tactics of Rosemont Copper’s former top executives led by Richard Warke

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InvestigativeMEDIA is republishing its 2012 series of stories on the original investors of the Rosemont Copper Mine and their role in a failed Sardinian gold mining project through a Vancouver, B.C. based mining company called Sargold Resource Corp.

One of the original Rosemont investors, Richard Warke, remains a key player in Arizona by seeking permits to develop a massive open-pit silver mine near Patagonia. Warke is now chairman of Arizona Mining Inc., which is seeking state and federal permits to develop the Patagonia mine.

Warke runs an array junior mining companies from Vancouver, B.C. and also serves as Executive Chair of NewCastle Gold Ltd., a company focused on exploring its multi-million ounce gold deposit in California.

These businesses are part of the Augusta Group of Companies, a conglomerate that Warke founded in 2006 comprised of Arizona Mining, NewCastle Gold Ltd. and Armor Minerals.

As detailed below, Warke’s management of Sargold Resources and its Sardinian gold mine raise serious questions. For additional information on Warke’s history of failing to disclose personal and corporate bankruptcies, cease trade orders and stock exchange delistings click here. A video timeline of Warke’s business history is here.

Warke is also featured in InvestigativeMEDIA’s 2012 award-winning documentary Cyanide Beach.

InvestigativeMEDIA’s series of stories on Warke and his business partners including the Sargold investment was later  featured in Global Mining Observer.

Toronto-based Hudbay Minerals Inc. purchased Rosemont Copper when it acquired Augusta Resource Corp. in 2014 in a $550 million stock deal. Warke was Chairman of Augusta Resource at the time of the purchase. Augusta Resource, under Warke’s direction, purchased the Rosemont copper prospect for $20 million in 2006.

Hudbay is now seeking state and federal permits to develop the Rosemont mine. InvestigativeMEDIA released its documentary Flin Flon Flim Flam on Hudbay’s worldwide operations and plans to develop the Rosemont mine in October 2015.

InvestigativeMEDIA’s original 2012 story on Warke’s investment strategy in the Sardinian gold mine through the now defunct Sargold Resource Corp. follows below.

Introduction

Augusta Resource Corporation is seeking government approvals to construct a massive open-pit copper mine and dump waste rock and mine tailings on more than 3,000 acres of the Coronado National Forest in the Santa Rita Mountains 35 miles south of Tucson.

The mine would be operated through Augusta’s wholly-owned subsidiary, Rosemont Copper Company.

Augusta, a Vancouver, British Columbia speculative mining company, has never operated a mine and has a very limited business history.

Five of the eight current members of Augusta’s board of directors, however, do a have mining history.

Between 2003 and 2007, these executives were on the board of directors of Sargold Resource Corporation. Sargold owned and operated an open-pit gold mine near the small farming village of Furtei in south-central Sardinia.

InvestigativeMEDIA reviewed Sargold’s publicly available business records and traveled to Sardinia and Vancouver to conduct interviews. The reporting lead to the video documentary “Cyanide Beach”.

InvestigativeMEDIA also prepared the following report on Sargold’s business history that includes a detailed analysis at the end of the historical narrative.

InvestigativeMEDIA offered to meet Augusta officials in Vancouver, but Augusta declined interview requests with the five current Augusta board members to discuss their actions as Sargold directors.

The history and analysis is annotated with links to Sargold’s press releases, regulatory disclosures, court records, Canadian mining claim reports, news articles and scientific studies on the unfolding environmental disaster left behind after the Sardinian gold mine was abandoned. [Read more…]

Hudbay executives brush off invitation to speak at Canadian premiere of documentary critical of Hudbay’s worldwide operations

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TORONTO—Arizona independent filmmaker John Dougherty on Thursday personally invited Hudbay Minerals’ top executives, directors, and shareholders to attend the Canadian premiere of his documentary film “Flin Flon Flim Flam” on the company’s troubled worldwide operations.

Mr. Dougherty extended the invitation during Hudbay’s annual shareholder’s meeting and offered an opportunity for Hudbay to answer questions following the upcoming screening of the film at 7:00 p.m., May 24, at the Royal Cinema in downtown Toronto.

Alan Hair, Hudbay’s President and CEO, brushed off the offer saying, “Thank you for the infomercial.” He then immediately adjourned the meeting.

Toronto is the first stop of a 13-city tour spanning Canada that will include stops in Montreal on May 25 and Ottawa on May 26 before heading west to Winnipeg on June 7 and Flin Flon on June 10.

The film documents Hudbay’s history of pollution in Flin Flon, conflict with First Nations in Manitoba, alleged atrocities at a nickel mine in Guatemala, brutality in Peru, and plans to construct a massive open-pit copper mine in Arizona in an environmentally-sensitive area that is the home to the only known wild jaguar in the United States.

The Canadian release of the film comes shortly after the New York Times in a front-page, Sunday story reported on allegations of Hudbay committing serious human rights abuses in Guatemala.

Hudbay is the subject of three civil suits in Toronto from Guatemalan peasants who allege the company committed gang rapes, murder and a shooting that left a man paralyzed.

Canadian author Alain Deneault will join Mr. Dougherty for the Montreal screening to answer audience questions following the screening. Mr. Deneault is the co-author of Imperial Canada Inc.: Legal Haven of Choice for the World’s Mining Industries.

Publication of the book was delayed two years after Vancouver-based Barrick Gold threatened to file a defamation lawsuit against the authors and publishers.

The Hon. John McKay, a Liberal Member of Parliament, is sending his Legislative Assistant to attend the Ottawa screening. Mr. McKay called for stronger oversight of Canadian mining operations abroad in the wake of the New York Times story.

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Award-winning journalist screening Hudbay exposé during Canadian tour

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Film highlights miner’s record of human rights and environmental abuses

(Phoenix, Ariz) Arizona investigative journalist John Dougherty will begin a 10-city Canadian tour on May 24 at the Royal Theatre in Toronto to screen his documentary “Flin Flon Flim Flam” on the worldwide operations of Hudbay Minerals, Inc.

The Canadian release of Mr. Dougherty’s exposé comes shortly after a New York Times April 2 front-page story reported on Hudbay’s dismal human rights record in Guatemala and pending civil litigation in Ontario that has national consequences for Canadian mining companies operating abroad.

Hudbay stands accused of murder, a shooting and gang rapes in connection with conflicts with indigenous communities in Guatemala. The film includes interviews conducted in September 2014 with many of the same Guatemalans featured in the Times story.

“Hudbay has a long history of tightly controlling information released to the media and the public,” Mr. Dougherty says. “This film produced in the United States provides a rare glimpse into the operations of one of Canada’s oldest mining companies without the threat of a defamation lawsuit that has been used by Canadian mining companies to stop publication of information in Canada. [Read more…]

Documentary exposes how a Canadian miner is seeking to destroy the habitat of the nation’s only known wild jaguar

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Rimrock, AZ—InvestigativeMEDIA’s documentary “Flin Flon Flim Flam” reveals the controversial history of Toronto-based miner Hudbay Minerals Inc. that is now seeking state and federal permits to construct a massive open-pit copper mine in the habitat of the nation’s only known jaguar.

A new video capturing the movements of the jaguar named El Jefe released this week is attracting widespread media attention. The video was produced and released by the Center for Biological Diversity and Conservation CATalyst.

Photo by Jonathan Troung

Photo by Jonathan Troung

The jaguar video comes just weeks after InvestigativeMEDIA released “Flin Flon Flim Flam” on the worldwide operations of Hudbay Minerals and its plans to construct the Rosemont mine on the Coronado National Forest in the Santa Rita Mountains southeast of Tucson, Arizona.

The documentary exposes Hudbay’s history of operating Canada’s most polluting copper smelter, the company’s alleged atrocities in Guatemala where it stands accused in a Toronto civil trial of murder, gang rapes and a shooting that left a man paralyzed, as well as the company’s conflicts with indigenous people in Peru.

The biologically-rich Santa Rita Mountains host a dozen endangered species including the jaguar. The proposed copper mine would destroy more than 3,000 acres of Coronado National Forest and render the northern half of the Santa Rita Mountains useless for recreation, according to the Arizona Game & Fish Department.

“The Rosemont Mine would destroy El Jefe’s home and severely hamstring recovery of jaguars in the United States,” said Randy Serraglio, conservation advocate with the Center. “The Santa Rita Mountains are critically important to jaguar recovery in this country, and they must be protected.”

Hudbay still needs a state Air Quality Control Permit, a federal Clean Water Act permit, and final approval from the U.S. Forest Service before the mine could proceed.