VANCOUVER, BC / ACCESSWIRE / June 16, 2015 / Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is issuing the following news release, as a result of a review by the British Columbia Securities Commission (“BCSC”), to clarify our disclosure. Gainey is issuing the following news release to clarify non-compliant disclosure.
On Gainey’s website, under the heading: Investors – Analyst Coverage, there was a hyperlink to a June 13, 2014 article by an analyst that erroneously stated that Gainey had a current resource on the El Colomo property. There are no current mineral resources on the El Colomo property. The analyst’s article did not refer to the NI 43-101 Technical Report on Gainey’s El Colomo property authored by David G. DuPre and filed on June 27, 2012. As Mr. DuPre states on page 48 of the report, which can be found on SEDAR, “The available drill data, surface sampling and test mining/milling are of historical significance only. It does not meet NI 43-101 criteria and thus, no Mineral Resource or Mineral Reserve Estimate can be assigned to the property by the author.” This hyperlink has been removed from Gainey’s website.
Portions of the Gainey website and the Gainey Corporate Presentation contained historic estimates for La Nueva Victoria and La Higuerita, which were not compliant with NI 43-101 requirements governing the disclosure of historic estimates. The portions of the corporate presentation that were non-compliant were on slides 9, 12 & 14. The sections of the website that were non-compliant were as follows:
• Projects – El Colomo – Highlights
• Projects – El Colomo – Map titled, “A Prolific Mining District”
• Projects – El Colomo – La Nueva Victoria
• Projects – El Colomo – La Higuerita
• CEO Blog – September 30 2014 entry
Specifically, these portions of the website and corporate presentation lack comments on the relevance and reliability of the historical estimates for La Nueva Victoria and La Higuerita, discussion of the assumptions, parameters and methods used in preparing these estimates, and comments on what work needs to be done to upgrade or verify these historical estimates as current mineral resources.
The historical estimate done by Robert Holladay in the year 2000 for La Nueva Victoria and reported in an internal Golden Anvil company report is not reliable for various reasons. The data used in this estimate came from closely spaced surface trenches that confirmed near-surface continuity along strike, but the shallow holes drilled by ASARCO in 1993 did not provide enough data to substantiate the down-dip continuity projections that were made by Holladay in his estimate. Also, for the drill sampling and assaying conducted on behalf of ASARCO, no information was found confirming the size of the drill holes, the initial weight of the samples, the methods and personnel used in splitting the samples, the security of the samples on site, or of the assayer. In this historical polygonal estimate, categories other than the ones defined by NI 43-101 were used; the categories of reserves and resources used are not compliant with CIM Definition Standards and are unreliable as discussed above.
Likewise, the historical estimate done by Jose Bravo Nieto in 1997 for La Higuerita is not reliable. Although surface sampling is dense, only one hole by ASARCO was drilled in the zone. Mr. Bravo-Nieto’s estimate assumed a vertical continuity of 100 meters, which was not substantiated.
In conclusion, a qualified person has not completed sufficient work to classify the historical estimates for La Nueva Victoria and La Higuerita as current mineral resources or mineral reserves, and the Company is not treating these historical estimates as current mineral resources or mineral reserves. A careful program of trenching and diamond drilling, designed and supervised by a qualified person, is needed to verify these historical estimates and perhaps upgrade them to current mineral resources.
In addition to the non-compliant disclosure of historic resources, the Company used a regional map in the company presentation and website that contained non-compliant disclosures of mineral resources of nine properties held by other issuers in the Sierra Madre Occidental Trend. This map was on slide 5 of the company presentation and in the website it was at the bottom of the Projects – El Colomo – Highlights page. On this regional map, the company disclosed mineral resources and mineral reserves that did not comply with NI 43-101. Specifically, in its statement of the resources for the nine properties, the Company did not use the applicable mineral resource and mineral reserve categories set out in NI 43-101, did not report each category of mineral resources and mineral reserves separately, did not state the extent to which mineral reserves were included in total mineral resources, erroneously added inferred mineral resources to the other categories of mineral resources, and did not state the grade or quality and the quantity for each category of the mineral resources and mineral reserves. In addition, the Company stated metal equivalent grades without also disclosing the grade of each metal used to establish metal equivalent grade. In addition, this disclosure of mineralization found on properties in the same mineral trend was potentially misleading because the Company did not state as a caution that the disclosures regarding nearby properties did not imply that the Company could obtain similar results from El Colomo. The Company has removed the non-compliant resource disclosures on the regional map on its website.
The final non-compliance issue to discuss in this news release is that the Company did not name the qualified person responsible for the technical information disclosed in either the Company website or the presentation.
This news release was prepared by Lawrence Segerstrom, a Director of the Gainey Capital Corp. and a Qualified Person under NI-43-101.