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8/22/09

YAY! Go GATA! Go ECU.to! Go Bankruptcy! YAY!


Why does GATA insist on pumping arch-dog ECU Silver (ECU.to) to its innocent flock?

  • Maybe it's something to do with the 1.75m shares held by Bill Murphy alone.
  • Maybe it's Wistar Holt's chunk of shares that's so desperately underwater.

But whatever the reason, it's beginning to look like the ECU.to management have been playing dirty with their own joint venture partners. So the question begs; will the whiter-than-whites at GATA condemn the seemingly illegal actions of ECU.to before the company loses its property rights or afterwards? Will GATA at least make the risk known to the poor saps that took their advice about serious and imminent legal risk on the horizon? After all, GATA is the first to cry gold manipulations and crimes to the world but seem to be playing precisely the same sort of games they themselves condemn by using their influence to pump a heavily owned and very dubious stock to their sheep for all its worth. Inquiring minds wonder whether full disclosure will be given by these shillers and cheerleaders.

The below comes from the June 2009 MD&A published by Golden Tag (GOG.v) yesterday. Enjoy.


On June 23, 2009, the Company gave a formal notice to ECU Silver demanding arbitration consequent upon having determined that ECU, the operator of the San Diego joint venture has failed to remedy fundamental breaches of the option and JVA in respect of the San Diego property. The Company became aware of a lien on the San Diego property at the end of February, 2009. A meeting was held in ECU’s offices in early March to discuss this matter and other breaches. Also, Golden Tag’s counsel in a letter dated March 20, 2009 formally notified ECU of these breaches and Golden Tag subsequently received assurances that the breaches would be rectified within the requested 30 day period. The notice of arbitration was issued, when after an almost 4 month period since the original meeting was held to discuss this matter, and despite several follow-ups by the Company during that time, the breaches were not remedied.

Among the breaches of ECU which Golden Tag believes will be substantiated at arbitration are that ECU : (a) Allowed a third party charge against the property contrary to the JVA; (b) Invoiced Golden Tag for joint venture expenses but did not remit the funds to pay joint venture suppliers on a timely basis, some suppliers still being unpaid ; (c) Failed to timely contribute its equivalent pro rate share of funding to the joint venture; and (d) Failed to follow proper procedures and timely financial reporting.

Due to these significant breaches, the Company plans to seek the right to assume operatorship of the property, dilution of the interest of ECU and/or compensatory damages and other relief. At this time, the breaches have still not been remedied. Golden Tag and ECU have named their individual arbitrators. A third arbitrator as outlined in the arbitration process in the JVA is planned to be appointed soon to form the arbitration committee/board.

Golden Tag also learned recently that ECU commenced unauthorized removal of surface stockpiles on the San Diego property in clear contravention and breach of the ECU and Golden Tag JVA. As such, the Company on August 13, 2009 presented a formal notice to ECU Silver demanding the immediate cessation of the removal of this material. Removal of these stockpiles and transport of the material at an approximate rate of 250 tonnes per day was continuing on a daily basis with a fleet of seven trucks making two trips per day. The material was being transported to the nearby processing facility of ECU. There are at least 40,000 tonnes of mineralized material grading 1% Lead, 1% Zinc and 100 grams Silver per tonne on the property. Golden Tag estimates that approximately 3000 to 3,500 tonnes had been removed from the property since on or around March 23, 2009 and until ECU ceased removal on August 14, 2009 after receiving the Notice. The Company has asked ECU for an accounting of the material that was removed without its consent.

The stockpiled materials represent a joint venture asset which cannot be mined or processed without the authorization and approval of the Joint Venture Management Committee. Such authorization and approval has not been requested or approved. This matter will be addressed at the arbitration hearing together with the other breaches mentioned in this report.