Southwestern Resources (SWG-T) has cautioned that results it had previously announced from the Boka gold project in Yunnan province, China, are not to be relied on.
The company took the measure after problems arose with its pre-feasibility study on the gold project, where it had previously published a measured and indicated resource estimate of 20.9 million tonnes grading 2.9 grams gold per tonne on the Boka 1 North zone and 10.3 million tonnes grading 3.3 grams gold per tonne on Boka 2 South. Those resource figures are now in doubt.
The company’s president John Paterson resigned on June 19 “effective immediately, citing personal reasons” (T.N.M., July 2/07), and was replaced temporarily by Timo Jauristo, who had been running Southwestern’s affiliate, Peruvian zinc-oxide explorer Zincore (ZNC-T).
Senior Southwestern executives and a committee of independent directors began a review of practices in the management of the Boka project, and visited the project to review results. It also engaged independent technical consultants and a law firm to advise on the findings.
It dismissed its local general manager, John Zhang, and concluded that quality controls on the exploration project were inadequate. Drill core samples had been “compromised” during exploration work. Southwestern had been splitting core, so intact samples may still be available to re-analyze, and an independent contractor, part of the reputable Societ Gnrale de Surveillance group, had been doing its sample preparation work in Kunming, Yunnan, 65 km south of the project site.
Both Chinese and Canadian laboratories had done assaying of the prepared samples.
Zincore found it necessary to wire out a news release reaffirming its arm’s-length relationship with Southwestern, which owns just under half of the company.
Shares in Southwestern, which had fallen out of the $7 range when early indications of problems at Boka became apparent (T.N.M., July 2/07), fell to $2.90 in Thursday trading, down $3.44.
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