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10/10/11

The East Asia Minerals (EAS.v) scam: Why hasn't ex-CEO Mike Hawkins been called out by the industry?

I think the main reason is that the industry is embarrassed about being suckered by the scumball Hawkins and his crew of scamrunners.

I was talking with a friend (respected mining industry figure) off record a few weeks ago and he told me a little about a conversation he had with his friend (a respected analyst in one of the big firms). Sadly I can't give you more than that on the IDs involved, but what 'respected analyst' mused to 'respected mining industry figure' was the difference between Bre-X and East Asia Minerals (EAS.v). The main problem with BRE-X, he mused, was that the scam had a hard landing* the story got too big too fast, too much light was shone upon the massive numbers it was causing in share price movements and market caps and the bullshit was discovered before the protagonists of the scam could get the thing back under control and cash out correctly. In other words, BRE-X got too noisy. It was too public. The officers involved went on record too much.

Whereas the East Asia Minerals (EAS.v) scam was run on heresay, whispers and off-record promises of great things to come, of "don't tell anybody but we got 20m oz/30m oz/pick-your-own-number here". It also suckered in a lot of decent and reputable names in the Canadian mining world, mainly because until that point, CEO Mike Hawkins had a decent reputation...I mean, nobody realized that he'd just gone to the dark side and was about to rip them all off bigtime.

So when the reality broke about EAS.v in May/June this year and the stock sank without trace, there were just too many red faces about to kick up too much of a fuss. But by then , Hawkins et al had cashed out and fled...with their money:


And as that $5.2m in gross proceeds came mainly from 20c options that Hawkins exercised, his cost base was minimal...in other words he took the $5m and ran.

Hawkins & Co learned from the BRE-X debacle and learned well. He ran his scam to perfection, suckered in the "right" people and when the time came EAS.v was given a soft landing by the industry and the press that feeds off its opinions because nobody wanted to stand up and say "I was fooled". In some ways I admire Hawkins for the stunt he pulled, but overall I'd still break his nose if I ever met him.

Disclosure: Never had a position in EAS.v, but was tempted for a while because "serious" players told me it was one to be on. Luckily I passed.

UPDATE: For all those coming from the 'Mexico Mike' site, you need to know that you mentor, Mike Kachanovsky, is a frontrunning pumping scumbag idiot and needs to go fuck himself before he loses any more of your money.

*especially for the poor dude who 'fell' out the 'copter