The president and CEO of Vancouver-based Mountainstar Gold has been slapped with a C$150,000 penalty by the British Columbia Securities Commission (BCSC) for making “false or misleading statements” regarding the Pascua Lama gold deposit in Chile.
The panel also permanently prohibited any trading in or purchasing of securities of Mountainstar, previously Mountain-West Resources Inc. In addition to the fine, Brent Hugo Johnson must resign his role, and is permanently prohibited from taking any similar role. Johnson also was permanently barred from trading in or purchasing securities or exchange contracts; relying on any exemptions of the Securities Act or engaging in investor relations activities.
A BCSC panel found in October 2018 that Johnson, between 2012 and 2015, made repeated false or misleading statements in its required disclosure documents about Chilean mining claims and related legal proceedings in Chile. The decision stems from claims that Mountainstar and Johnson made in regards to some of the ground underlying Pascua Lama, at the time a multi-billion-dollar project that Barrick Gold was developing in Chile.
Mountainstar said that it had an agreement with a Chilean national, referred to as "L" in the decision, and that L had granted the company an option to acquire a group of claims that covered some of the same ground as Pascua Lama. L was undertaking legal action in Chile to obtain the ground and was seeking to have Barrick's claims cancelled. Mountainstar paid $4.6-million to L under the option agreement.
The panel said it is unlikely that investors would have invested in Mountainstar if the company had accurately disclosed the facts surrounding the mining claim and related legal proceedings.
The penalty was the second in less than a year for Johnson. In August 2018, a BC judge found Johnson in contempt of court and ordered him jailed for 18 days. The case related to money Johnson was ordered to pay during a lengthy dispute with Mountainstar's former president.
Last month, Chile’s Supreme Court ruled in favour of Barrick (TSX:ABX) revoking the permanent closure of the Canadian miner’s Pascua-Lama gold-silver project.