Handbags at dawn! East Asia Minerals (EAS.v) demands a retraction from Northern Miner

Here's the NR, comment coming up:

August 05, 2010
East Asia Minerals Serves Libel Notice On Northern Miner -- Vancouver-Based Company Demands Apology and Correction

For Immediate Release, August 5, 2010 TSXV: EAS

VANCOUVER, B.C. -- Thursday, August 5, 2010 -- East Asia Minerals Corporation (TSXV-EAS), a Canadian mineral exploration company with its head office in Vancouver, delivered a legal notice today to The Northern Miner newspaper over a recent article which made defamatory and misleading accusations concerning the company's disclosures about Indonesian property currently under exploration.

In a statement released today, Chief Executive Officer and President Michael Hawkins said: "We are extremely disappointed that The Northern Miner published misleading information about our disclosure practices in a prominent article on its website about protected forest in Indonesia. We have asked the newspaper to do the right thing, retract its erroneous accusation that we failed to tell shareholders about the status of the property, and acknowledge that East Asia Minerals made timely and complete disclosure starting nearly three years ago".

In a letter sent to The Northern Miner, the Company expressly reserves the right to file a libel lawsuit to recover damages from The Northern Miner for injury to reputation and financial loss.

About East Asia Minerals Corporation

This isn't really that surprising and I'll tell you why. East Asia Minerals (EAS.v) is a company this author knew little about before last Friday (as mentioned in the post that day, though out of LatAm the drill results had been so good that word of them had filtered through enough times). I'd also never taken a position on the stock (which is still true today, fwiw).

But last weekend, it only took the most basic of DD and asking around a bit for this author to see that the Northern Miner article (pasted here below in its entirety this time, because it's fair game for public material now EAS.v is getting legal on their tushes) was a really biased, misleading and generally bad piece of journalism that was likely written with an a priori agenda. Just for one thing, it took me about five minutes on SEDAR to confirm that EAS.v has indeed made clear and specific public disclosures about the nature of the forestry issues at Miwah, something that Northern Miner said they hadn't done. That alone is libel....probably. So if all it takes this humble scribe is a minimum of snuffling around to find out the facts, why did Northern Miner, the supposed "Bible" of mining journalism (though that mantle has slipped badly over the last few years) decide not to include this basic DD in its report? Gotta make ya wonder....

So anyway, here's the whole allegedly libellous NM report reproduced for public interest. It'll be interesting to see whether NM stands by its crap or goes the humble pie route.

UPDATE: Trish eats it

29/07/2010 13:23:00

East Asia Minerals unresponsive about protected forest in Indonesia

By: Trish Saywell

Why would it take several years for a Canadian company with a history of strong drill results in Indonesia to disclose to its shareholders that a large portion of its tenements in the Southeast Asian nation are on land designated as protected forest where open-pit mining is banned?

It's a question The Northern Miner has asked junior explorer East Asia Minerals(EAS-V) repeatedly since June and has yet to receive a fathomable explanation.

Hong Kong-based chief executive Michael Hawkins -- who is "in the bush" in Indonesia -- according to the company's head of corporate communications Nick Kohlmann, has not responded to a stream of queries. And as for the Toronto-based Kohlmann, he says he "has no details" and isn't "privy to the various ongoing intricacies of the operations, legal agreements, permits, etc," which he explains in an email after six weeks of badgering, "is the responsibility of the senior technical and Indonesia-based staff and Michael Hawkins."

So what gives?

In February Indonesia issued a new regulation (No. 24) that allows mining, power plants and other projects deemed strategically important (such as toll roads, telecommunication network and broadcasting facilities) to take place within protected forest areas, according to Joel Hogarth, a lawyer with O'Melveny & Myers in Singapore. But the regulation, now law, only permits underground mining activities in protected forest, not open-pit mining, which is more commonly used in Indonesia.

Even then it's not guaranteed that an underground mine will ever wind up in production. "While the regulation opens up the possibility of mining in protected forest areas it remains to be seen how easy this will be in practice," Hogarth says. "To my knowledge no such approvals have been granted yet for mining, although there is at least one geothermal project applying for approval under the new regulation."

Hogarth explains that while ‘in principle' licenses (ijin prinsip) can be granted by the Ministry of Forestry for an initial period of up to two years, the full forestry ‘lend-use' licence (ijin pinjam pakai) requires the approval of the House of Representatives (DPR). And such approvals from the DPR "have been difficult to obtain and subject to political considerations."

"It strikes me as a pretty tough procedure," he says in a telephone interview from his home in Singapore. "That's like going to Parliament to get something approved."

Interestingly it was only after repeated queries that East Asia Minerals finally disclosed in its most recent drill results on July 27 that "a large portion of the tenements are currently within Hutan Lindung, the lowest category of Protection Forest." There is no mention of this fact in previous press releases, nor in the company's 2009 annual report.

By contrast, another company, Intrepid Mines (IAU-T) clearly discloses in its press releases and on its website that its Tumpangpitu project in Indonesia is situated within protected forest, "a category of forest land in which Indonesian law restricts activities and prohibits open-pit mining." Intrepid notes that it is working with relevant Indonesian authorities to allow for a review of the status of forest land where it affects the company's operations. As for its Katak prospect, Intrepid explains that it is in a category of land deemed "production forest," which has far fewer development restrictions.

East Asia has yet to specify exactly how much and which of its tenements fall within protected forest. (It has a 70-85% interest in six advanced gold and gold-copper properties covering 400,000 hectares in Aceh Province, Sumatra, and on Sangihe Island in North Sumatra.)

What it does repeat in every press release about its flagship Miwah gold project, a high sulphidation epithermal gold deposit in Aceh Province, Sumatra, however, is that it is in a very similar volcanic setting to the Martabe gold-silver deposit, also in North Sumatra. It notes that the alteration system is of comparable size. But what it fails to point out is that the owner of Martabe, a Hong Kong-based company called G-Resources, plans to mine Martabe as an open-pit.

Hawkins has been selling off shares consistently over the past six months - including a sale of 94,000 shares at $7.91 apiece on April 12. (Over the last year East Asia Minerals has traded in a range of $1.21-$8.73 per share.)

The chief executive held 481,000 shares in the company as of Jan. 12, 2010,) in October 2009, and since then has been selling off his holdings.)

East Asia Minerals' share price has moved from a low of 12¢ a share in November 2008 to $3.90 per share in December 2009 and is currently trading at $6.40 per share.

The junior has about 72 million shares outstanding.

Why is East Asia Minerals (EAS.v) hiding key facts from its shareholders?

The rise of East Asia Minerals (EAS.v) on the back of what can only be described as spectacular drilling results at its Miwah project has been so well documented that even your myopic LatAm anal yeast has heard of the story on numerous occasions (just look at that 12 month chart above for further details). But maybe there's trouble brewing in paradise, as this Northern Miner report dated yesterday below points out. What strikes me as strange here is that the company itself, busy exploring and drilling away over there, claims to have no idea about the laws that will stop the project from developing and the enormously trappy permitting processes it would have to go through even for a sub-optimal underground works.

Northern Miner is a subscription service and they get pretty anal about people pasting their stuff, so here's just the first portion of the report (about as far as I'll push this window, folks). You'll have to click through and sign on to get the rest.

Why would it take several years for a Canadian company with a history of strong drill results in Indonesia to disclose to its shareholders that a large portion of its tenements in the Southeast Asian nation are on land designated as protected forest where open-pit mining is banned?

It's a question The Northern Miner has asked junior explorer East Asia Minerals(EAS-V) repeatedly since June and has yet to receive a fathomable explanation.

Hong Kong-based chief executive Michael Hawkins -- who is "in the bush" in Indonesia -- according to the company's head of corporate communications Nick Kohlmann, has not responded to a stream of queries. And as for the Toronto-based Kohlmann, he says he "has no details" and isn't "privy to the various ongoing intricacies of the operations, legal agreements, permits, etc," which he explains in an email after six weeks of badgering, "is the responsibility of the senior technical and Indonesia-based staff and Michael Hawkins."

So what gives?

In February Indonesia issued a new regulation (No. 24) that allows mining, power plants and other projects deemed strategically important (such as toll roads, telecommunication network and broadcasting facilities) to take place within protected forest areas, according to Joel Hogarth, a lawyer with O'Melveny & Myers in Singapore. But the regulation, now law, only permits underground mining activities in protected forest, not open-pit mining, which is more commonly used in Indonesia.

Even then it's not guaranteed that an underground mine will ever wind up in production. "While the regulation opens up the possibility of mining in protected forest areas it remains to be seen how easy this will be in practice," Hogarth says. "To my knowledge no such approvals have been granted yet for mining, although there is at least one geothermal project applying for approval under the new regulation."

Hogarth explains that while ‘in principle' licenses (ijin prinsip) can be granted by the Ministry of Forestry for an initial period of up to two years, the full forestry ‘lend-use' licence (ijin pinjam pakai) requires the approval of the House of Representatives (DPR). And such approvals from the DPR "have been difficult to obtain and subject to political considerations."

"It strikes me as a pretty tough procedure," he says in a telephone interview from his home in Singapore. "That's like going to Parliament to get something approved." CONTINUES HERE

Disclosure: no position in EAS.v

Peru growth: It didn't take long for the Kool-Aid to start flowing

Just the other week in this post, your humble scribe rounded off a look at the state of Peru imports and exports (the lifeblood of the country's growth) by saying:

A recovery is on? Yes no doubts, with that steady climb in imports underlying the good news. Anything better than 2007 or 2008? Nope. So next time the headlines scream the Kool-Aid at you, remember the real context of the "growth" figures that you'll see out of Peru this year.

And yep, it's already started. The Goebbels method of "tell em enough times and they'll believe it" is spearheaded by the numbskulls at Northern Miner with this headline from yesterday:

Peru's Mining Growth And Pains

LIMA, PERU -- While much of the rest of the world struggles to put last year's economic slowdown behind it, Peru has been surging ahead with almost Chinese-levels of growth.

Sorry, no link because NM have the temerity to charge subscriptions and use firewalls for their uninformed pumpjobs. But don't worry, you're not missing anything by reading the heap of guff on offer there. I mean, even if we take the Northern Miner's moronic parameters and check actual facts.....
....Peru doesn't stack up, not even close. Have you ever wondered what an economic hard-landing looks like in chart form? Check that red line above. And the only time Peru has got near China in the last ten years was the overheated 2008 that led the country straight over the cliff.

So Northern Miner, you win this week's coveted award. Two choices for you fools in the future; either check facts before opening mouths or just take the advice and