Gold bar replicas are displayed at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, on March 7, 2023.CHRIS HELGREN/Reuters
Junior mining company MacDonald Mines Exploration Ltd. has withdrawn its assay results on its Scadding project in Ontario, citing inconsistencies.
The Toronto-based exploration company said in a news release that it is conducting a review “to identify and quantify the extent of any incongruities.”
MacDonald Mines’ gold and copper project is located 20 kilometres southeast of Sudbury. The property is in the very early drilling stage and the company has not proven its economics.
This is the second junior Canadian exploration company this month to blindside investors with assay results problems.
Toronto-based Red Pine Exploration Inc. a few weeks ago said that it found inconsistencies in some of its drilling results at its Wawa gold project in Ontario, and accused its former chief executive officer, Quentin Yarie, of manipulating results of hundreds of gold assays. Red Pine stumbled upon the assay results inconsistencies by accident after one of its geologists discovered an anomaly in its drill results.
TSX Venture Exchange-listed MacDonald Mines has not disclosed how it discovered the problems with its assay results, or who it believes is responsible.
Red Pine’s former CEO, Mr. Yarie, worked at MacDonald Mines for more than a decade. He joined as senior vice-president of exploration in 2010. He became president and chief operating officer in 2013. He was later promoted to CEO, then chairman. He left the company in 2022.
Mia Boiridy succeeded Mr. Yarie as CEO, and previously worked at Red Pine alongside him for a few years. In an interview, she said she had “no inkling of any kind of manipulation” of gold assay results at Red Pine. Ms. Boiridy left MacDonald Mines in September, 2021.
Mike England, the interim CEO of MacDonald Mines, did not respond to requests for comments.
Mr. Yarie could not be reached for comment.
Mr. Yarie also served as CEO of Honey Badger Silver Inc. for about five years until the summer of 2020. The B.C. company said in a release on Tuesday that its current portfolio of silver properties was acquired after he left.
“The company does not rely on any opinion of Mr. Yarie respecting its properties and has no reason to do so in the future,” Honey Badger Silver said.
Well-known gold investor Eric Sprott is the biggest shareholder in MacDonald Mines. He holds a 4.9-per-cent stake, according to Refinitiv.
Mr. Sprott in an interview said he’d not heard of the assay results problems at MacDonald Mines, and indicated he wasn’t overly upset at the turn of events in large part because it is only a tiny part of his portfolio.
“I mean, these things happen, right?” he said.
“I probably own 200 different stocks. Okay, so one’s misreported the assays. Well, I guess if you’d asked ahead of time, what are the odds of one out of 200 misreporting their assays, eh? Pretty good.”
Mr. Sprott is even hoping that the news could end up being a positive.
“Me being the optimistic, I’m kind of hoping that maybe the assays were underreported,” he said. “But the odds of that are probably 10 to one.”
The junior Canadian gold sector has been rocked by several assay results scandals in the past.
In 2009, John Paterson, former CEO of Southwestern Resources Corp., admitted to fraud and illegal insider trading after manipulating the company’s gold assay data. The B.C. Securities Commission banned Mr. Paterson for life from acting as a company officer or director.
The most notorious case of direct assay manipulation revolved around Calgary-based Bre-X Minerals Ltd. In the late 1990s, Bre-X salted its assays at its Indonesian gold project to make it appear as if its purported gold find was a bonanza. The find was later revealed as a hoax and investors lost about $6-billion as a result.
MacDonald by comparison is a microcap company. Its market value on Tuesday was $1.3-million.