Fraud charges laid in Perilya scandal

Three Australian prospectors have been charged with fraud after they persuaded Noranda (TSE) to buy a stake in a salted gold prospect near Karpa Spring in Western Australia. The three men were charged with conspiracy to defraud and obtaining property by means of false pretenses. In July, 1990, an Australian junior company called Perilya Mines and Noranda jointly announced they had paid $6 million for a 30% stake in the Karpa Spring gold discovery, which was brought to them by the accused prospectors (TNM, July 23 /90).

Last summer, initial reports of spectacular drill assays from the Karpa Spring find sent shares of Perilya soaring on the Perth stock exchange. But within a few days, follow-up drilling by Noranda failed to duplicate the high-grade results.

The fraud squad began its investigation into the case last August after Perilya and Noranda complained to police in Perth. The companies also took the three men to court later that month in a bid to freeze their assets, including the purchase price.


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