Frontino Gold Mines: Cui Bono?

What the hell is going on at the Frontino Gold Mine in Colombia?

We already know that Medoro Resources (MRS.v) wants to buy the mine and that big money and Colombian government will is backing their bid. We also know that the people of Segovia (the local town) and most importantly the workforce of the mine who actaully own the mine by collective agreement are against the sale.

So who is going to benefit from terrorist attacks on the union leaders of Frontino Gold Mines? Why was one of the workers' directors shot three times and narrowly escaped death this week? Would anyone care to ask Frank Giustra about the tactics being used to scare people who oppose his move into Colombia? There's some dirty business going on here, folks. Here's the report translated:

At 12:30pm on June 5th 201o in the municipality of Segovia, North-East Antioquia, Colombia, the union leader of Sintramienergética Segovia division and Health Secretary of the governing body John Jairo Zapata Marulanda was shot and injured by three bullets at the hands of hired assassins on a motorcycle.

John Jairo is 37 years old and has more than 15 years of service in the Frontino Gold Mines Company gold mines. He was taken from the crime scene to the Segovia hospital where his condition was stabilized and then flown to the city of Medellín where he underwent surgery.

It is necessary to remember that in the last few days, Mr. Serafino Iacono, a large shareholder of Medoro Resources (MRS.v), has referred to the Frontino workers as a small group made up of paramilitarists and guerrillas and he was going to take care of the case in conjunction with the government.

Last week, regional president Dairo Rua and all other members of the union directive of Frontino Gold Mines received death threats. Via e-mail, the directive was declared a military target due to its opposition of the sale of Frontino Gold Mines to Medoro Resources and were told they had 15 days to get out of the gold mining zone.

Ther multinational has offered a derisory sum for the company and its pension obligations. kepping in mind that the company belongs to the workforce and to the retired workers, in the face of which the union has stated its absolute non-agreement to the deal and the negotiations which are suspected to be overssen by wealthy members of society and the Uribe government.

Also threatened with death against themselves and family member are Marcos Gaviria Lujan and César Augusto Duque, president and vice-president respectively of the Association of Pensioners of Frontino Gold Mines, who were taken by air to the city of Medellín under strict security measures with their families. Continues here.

Frank Giustra's trained monkey gets in on the desperate Medoro (MRS.v) pumping

As we've already pointed out here at IKN, Medoro Resources (MRS.v) now finds itself with a hatload of problems regarding its takeover of the Frontino Gold Mine in Colombia. With local unions and the town itself getting legal on Medoro and telling them they cannot possibly be buying the asset because they are the owners and they ain't selling, this one will be dragging through Colombia's courts for years on end.

MRS.v has already tried to throw stardust in the eyes of the masses by wheeling out a Gov't minister or two to tell people the gov't supports Medoro in this fight. Unfortunately what Giustra, Keep and their cronies failed to tell people on that one was the gov't has and will have no say in this matter; it's a legal battle in store and the Colombian courts are (famously) separate and independent of Uribe&Co's way of thinking. This didn't stop The Can of Corn trying to pump the thing a few days ago (as noticed on the blog), but the balloon is getting tired and the deflation picked up speed yesterday:

So what does Franky G do to remedy this? Why, he gets his trained monkey Thom Calandra to make up shit and pump it to the sheep at Stockhouse. Here's what Thom Cassandra wrote yesterday evening to his Tickertrax flock of ignorants:

"More congratulations: Medoro Resources (TSX: V.MRS, Stock Forum) appears to have locked in the Frontino Mine, the pension-troubled yet lush and historic mine below the town of Segovia in Antioquia. Congratulations to consultant Serafino Iacono, who helped engineer the $200 million pending purchase – pursuant to due diligence, Medoro CEO John Hick tells me. We here have been following Medoro as a gateway into the world of Colombia mining since its predecessor at El Marmato, Colombia Goldfields. We own the shares via an ill-timed purchase of Colombia Goldfields shares several years ago at insanely high prices."

Yeah, that's right: the stock slides 8.9% (and was only saved from much worse by a last-minute bailage) but in the weird world of the shill Calandra this is cause for congratulations. He doesn't mention a thing about the legal battle that is already out there and will only get worse; no, this supposedly independent commentator ignores all the opposite side and just runs with the direct party line from his geldmeisters over at Endeavour Fin. Total, one-sided bullshit and a disgraceful exercise in palming off crap to people who don't know better.

At least Cassandra admits the snafu he made on buying the previous Frontino incarnation, Colombia Goldfields. What that shows you is that Cassandra really has no idea of what he's talking about when it comes to the structural company backgrounds of Colombian miners, so even when he proudly announces that he's putting his money where his mouth is (and even then his track record suggests his word is utterly untrustworthy) you have no idea whether you're following him in to a live prospect of just another overhyped POS.

Calandra has the track record of a fraudster and has deeper agendas with big money people, so you'd better be very careful about what he's telling you, dear investor.

Mo' Medoro (MRS.v)

Hot on the heels of yesterday's post about the travails of Medoro Resources (MRS.v) in Colombia and the dispute over ownership of the Frontino gold mine, the Frontino unions and locals sent out another NR yesterday. Here it is.

Sintramienergetica, Segovia Section: Press Release From the Rightful Owners of Frontino Gold Mines

Sintramienergetica, Segovia Section -

1. We, the worker's union, the people of Segovia, the creditors and the retirees are the rightful owners of Frontino Gold Mines as fully documented by a legal deed of 1979 that is readily and publicly available at the courts. This legal deed leaves no doubt whatsoever that we are the rightful owners of Frontino Gold Mines. The Canadian company Medoro is well aware of this fact but nevertheless fails to disclose it to Canadian authorities as well as to the Colombian people.

2. In the last days defamatory remarks by Medoro and especially by Mr. Iaicon Serafino Iacono have been made, that portray us as a marginal group that does not represent the Colombian people. We want to make clear that we represent the entire population for which reason this press release has been signed by the leaders of the Colombian National Worker's Union. Mr. Serrafino Iacono and Medoro Resources are clearly outsiders that hardly seem to understand the needs of the Colombian people. Frontino Gold Mines is a Colombian national treasure owned by Colombians and we will under no circumstances allow it to be taken by a foreign company. The proceeds from Frontino Gold Mines are urgently needed to improve the miserable life conditions and poverty of the region where even basic needs of life are absent. Medoro Resources is trying to take our only asset the welfare and livelihood of an entire region. We will not allow this to happen.

3. Medoro Resources has failed to disclose in its filings with Canadian authorities the existence of this legal deed as well as the existence of a lawsuit against it. We will take national and international legal action against Medoro to prevent what is legally ours from being taken from us. We ask all Colombians and Canadians to support us in our fight for survival and for better living conditions against Medoro Resources. We will also take legal action against those people who finance Medoro Resources and Mr. Serafino Iacono.

4. The Central Union of Workers (CUT), FUNTRAENERGETICA, (National Federation of Workers), SINTRAMIENERGETICA, (National Federation of Workers), and SINTRAMIENERGETICA, Segovia Section, the people of Segovia, and the entire region emphatically reject the claims on our assets by Medoro Resources, and are outraged that this Canadian company would attempt to take a Colombian treasure that is rightfully owned since 1979 by the pensioners, active workers, and the regional community. We call upon all national and international workers' organizations, the world-wide mining community, and all free people to show solidarity against Medoro Resources, and ask them to stand with the workers against this gross violation of their legal rights. We will not stand down, and will fight for our survival.

Dairo Rua, Presidente, Sintramienergetica Segovia Section

Raul Sosa Avellaneda, National President of Sintramienergetica

Tarcisio Mora Godoy, National President, CUT, FUNTRAENERGETICA

Joaquin Romero, President, CUT

For what it's worth, I really don't know which side is right and which is wrong on this issue. What I do know is that MRS.v has a whole heap of legal woes coming its way if it wants to take control of Frontino and the case is likely to drag on for years.

Medoro Resources (MRS.v): The can of corn mans the pumps

On Monday, IKN noted the very, very large difference of opinion regarding the Frontino Gold Mine between Medoro Resources (MRS.v) (Part of the Giustra&Keep Show, with fraudulent sycophant Cassandra marching to orders) that's trying to buy the mine via its liquidator and the Union and citizens living and working at the site who claim they are 'the true owners' of the mine. As well as the ownership dispute, the miners and their unions also charge MRS.v and friends of running a dirty tricks campaign, trying to label them as terrorists and all such stuff.

So on Tuesday, the Colombian government came out with...yep surprise.....a statement supporting the Canadian side of the spat and rejecting the Frontino locals' arguments. I mean, don't want to be labelled as FDI-unfriendly, do we? The next thing we know is that The Can of Corn is pumping this governmental statement for all it's worth and trying to breath life into the flailing share price. Here's an example, taken from this morning's 'Canaccord Morning Coffee' publication:

Medoro Resources* (MRS : TSX-V : $0.68), Net Change: 0.05, % Change: 7.94%, Volume: 5,129,123 More gold for the MRS's? Medoro went on a tear in early trading on very heavy volume following news that the Colombian government supports its acquisition of Frontino. On April 5, 2010, the Colombian Minister of Mines and Energy issued a press release supporting Medoro Resources recently proposed acquisition of Frontino Gold Mines. The press release states that this transaction “clears the way for a better future for more than three thousand families in the municipalities of Segovia and Remedios whose livelihoods depend on gold mining. It further noted, “These negotiations are a demonstration of investor confidence in Colombia and, moreover, will result in social advancements for the region as well for the mining industry of the country." Frontino, which has been producing gold since the mid-19th century, filed for bankruptcy protection back in 2004, after gold prices fell, violence in the area increased, and the company's pension liabilities and payroll became unsustainable. Since then, the bankruptcy court has failed to find a buyer. On March 31, Medoro announced that they had agreed to pay about $200 million to buy Frontino’s assets. The payment will go to a fund to ensure full payment of all pension entitlements and payroll liabilities. The deal also insures the stability of the current workforce of the company; Medoro has agreed to continue to employ 1,600 workers for one year. According to Frontier’s legal advisor Luis Fernando Alvarado, the gold produced about 55,000 ounces of gold in 2009 from its various mines at an approximate cost of $400 an ounce. He also said that in 2009 the company posted net profit of $8-9 million. Medoro is a gold exploration, development and mining company with a primary emphasis on Colombia. It operates the producing Mineros Nacionales gold mine located in Zona Baja at Marmato and is conducting an exploration and infill drilling program at its Marmato Project to upgrade and expand its gold resources there. It also holds a 100% interest in concessions in Venezuela where working to obtain exploitation permits and has interests in gold exploration properties in Mali.

So what The Can of Corn is putting forth is the shiny-happy-holding-hands version, verbatim from the government of Colombia and its pally pals over at MRS.v (and EDV.to, of course). But what da boyz over at The Can of Corn know full well but daren't possibly put into print is:

1) The government of Colombia has no say at all in this matter. Not only is the case bound to end up as an ownership dispute in front of the Colombian judiciary, but said judiciary is totally separate from the country's executive. And to labour the point, the Colombian judiciary has shown time and time again over the past eight years that it's not at all afraid fo standing up to Uribe's bullyboy gov't and passing judgements that are embarrassing to the admin.

2) Ownership disputes of lands, properties, businesses etc can (and most often do) lasts quite literally years and years without resolve and can often get dragged through decades. In this case, there's a $200m price tag in play and that's a lot of moolah. Don't think for a second that a simple statement by a simpleton minister is going to decide this one.

But The Can of Corn can't go round telling the truth, y'see....what it has to do is pump as hard as it can before....oh looky!...the truth starts seeping out. It needs to pump hard now to get its underwater clients out and sold to you retail saps, so expect a few more rose-tinted proclamations from the shysters in the weeks to come. IKN confidently predicts that this story will all end in tears., so don't be one of the ones left crying, yeah?

Mining news from Colombia, the new politically riskless zone according to Thom Calandra and other mining analyst idiots

Ok, folks, let's play Spot The Difference: Can you see any slight discrepancy between this press release from Medoro Resources on March 31st:

TORONTO, March 31 /CNW/ - Medoro Resources Ltd. (TSX-V: MRS) is pleased to announce that it has signed an asset purchase agreement (the "Agreement") with Frontino Gold Mines Ltd. ("Frontino") represented by its duly appointed and legally confirmed liquidator and legal representative, Mr. Luis Fernando Alvarado, to acquire all of the assets of Frontino, located near the city of Segovia, approximately 220 kms north of Medellin in Antioquia, Colombia. The Agreement has been authorized and approved by the advisory board of Frontino, which includes the Liquidator. CONTINUES HERE

And this press release from those calling themselves the true owners of Frontino:

SEGOVIA, COLOMBIA--(Marketwire - April 5, 2010) - This press release is in answer to the public statement of the Canadian company Medoro Resources, dated 31-March-2010, in which Medoro claims to have signed a purchase agreement for the assets of Frontino Gold Mines (Colombia).

"On behalf of the worker's union, the creditors, and the people of Segovia, who are the legal owners of Frontino Gold Mines - we do not know of any such agreement, nor will we recognize any such agreements," said Dairo Alberto Rua, Presidente, Sintramienergetica of Segovia.

"I believe the same statement by Medoro also suggests that Medoro has other plans for workers currently employed by Frontino Gold Mines. On behalf of the entire population and the worker's union, will firmly and decisively oppose any such plans by Medoro," said Alfredo de Jesus Tobon Alvanes, Presidente, ASOACREF.

"We know exactly the worth of Frontino Gold Mines, and will not allow Medoro and persons to take our assets at a price that is a tiny fraction of its true value," Dairo Rua continued.

"On behalf of the owners of Frontino Gold Mines, we want the world to know that we will never accept any such agreements with Medoro, whose behavior has caused great upset, concern and unrest in the area. We believe that Mr. Luis Fernando Alvarado Ortiz and Medoro Resources are trying to create chaos and fear in the mining district of Segovia," said Alfredo de Jesus Tobon Alvanes.

"Only a general assembly of the current creditors (shareholders) can make any decisions in regards to the assets of Frontino Gold Mines. It is very clear that Mr. Luis Fernando Alvarado Ortiz is neither a creditor nor an owner of Frontino Gold Mines and therefore has no right to make decisions," said Alfredo de Jesus Tobon Alvanes. "Our ownership rights are fully documented by a number of legal deeds."

"A criminal complaint against Mr. Serafino Iacono has been filed with the Prosecutor General of Colombia for alleged false and malicious statements made against the workers and owners of the assets of Frontino Gold Mines," said Mr. Rua.

"A coalition consisting of the workers, owners, and creditors of Frontino Gold Mines, along with the Segovia City Council and the people of the region, strongly and unanimously reject the attempts by Medoro Resources to take what is rightfully and legally ours, and demand that our voices be heard and that the law be respected," said Mr. Rua.

For more information, please contact

"SINTRAMIENERGETICA" Sectional, Segovia
Dairo Alberto Rua
President
Cell: 313 645 4601 / 311 333 9560
dairorua@hotmail.com

But of course, Colombia is this wonderful new, shiny heaven for Canadian junior miners, isn't it? You see, this is the kind of crap company that the fraudster Thom Cassandra* pumps to his greenhorn flock, as according to that illegal trader anything that Frank Giustra touches turns immediately to gold. I vomit.


UPDATE: Answering a reader's mail. Yes, when I used the words "fraudster" and "illegal trader" to describe Calandra I wasn't joking. Here's the SEC litigation release:

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19028 / January 10, 2005

Securities and Exchange Commission v. Thom Calandra, Case No. C05 00135 JCS (N.D. Cal. filed January 10, 2005)

SEC BRINGS FRAUD CHARGES AGAINST FORMER CBS MARKETWATCH COLUMNIST THOM CALANDRA FOR ILLEGAL TRADING SCHEME

The Securities and Exchange Commission today brought and settled civil fraud charges against Thom Calandra, a former columnist for the Internet website CBS MarketWatch.com. The Commission alleges that Calandra profited by secretly selling stocks shortly after his investment newsletter's positive recommendations of the stocks caused their prices to rise. In settling the matter, Calandra, who lives in Sausalito, California, will pay over $540,000 in disgorgement and penalties.

According to the Commission's complaint, filed in the Northern District of California, Calandra made over $400,000 in illegal profits through a practice known as "scalping"-buying shares of thinly-traded, small-cap companies, writing highly favorable newsletter profiles recommending the companies to his newsletter subscribers, and then selling the majority of his shares when the increased demand generated by his favorable columns drove up the stock price. From March to December 2003, Calandra followed this "Buy-Write-Sell" pattern for 23 different stocks that he covered in The Calandra Report, without disclosing his actions to his readers.

In addition, the Commission alleged that Calandra failed to tell his readers that he had received compensation from a stock promoter affiliated with two mining companies that Calandra profiled in The Calandra Report. The compensation took the form of heavily-discounted shares in the two companies-shares which Calandra later sold at a substantial profit after the stock prices rose following his favorable newsletter write-ups.

Calandra, without admitting or denying the allegations in the Commission's complaint, has agreed to a permanent injunction from further violations of the antifraud provisions of the federal securities laws (Sections 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder), and from further violations of Section 17(b) of the Securities Act of 1933, which prohibits the non-disclosure of compensation received for providing publicity about a security. Calandra also will disgorge $416,109.58 in illegal trading profits and prejudgment interest and will pay a civil penalty of $125,000.

But hey, this is 2010 so feel free to trust the dude now that he's doing something completely different with his time these days by..... errr........ writing highly favorable newsletter profiles on thinly-traded, small-cap companies and recommending the companies to his newsletter subscribers.

*According to the Greek myths, after being cursed by Apollo nobody ever believed Cassandra's predictions again. source.