Misinformation about the status of Aurelius Mineral’s Aureus East property on the Eastern Shore is still being circulated by the company and financial publications, even after Nova Scotia Environment confirmed, once again, there have been “no changes” in the company’s permits.
Aurelius CEO Mark Ashcroft sees it differently, but we’ll get to that.First, some background.
Two months ago, the Halifax Examiner reported on the “tall tales” being spun by the Toronto-based gold exploration company, which was telling investors that the Dufferin gold mine site in Nova Scotia that it purchased last year from Sprott Resource Lending, was “one of only two permitted gold mines and mills in the province.” The other would be Atlantic Gold’s open pit Touquoy gold mine in Moose River.
Aurelius made the same claim in its 2020 National Instrument (NI) 43-101 Technical Report, which its principal regulator, the British Columbia Securities Commission (BCSC), obliges companies to file to ensure “public disclosure of scientific and technical information” about their mineral projects.
On page 11 of that 2020 Technical Report for the Aureus East property, Aurelius states that:
The company also holds an Environmental Approval, and Industrial Approval for the Property, both of which remain in place and valid.
Well, no. Actually, it doesn’t and they don’t.
Nova Scotia Environment refutes Aurelius claim
The Examiner did a quick fact check on March 10, asking Nova Scotia’s Department of Environment and Climate Change whether Aurelius Minerals, or its subsidiary Aureus Gold that operates in Nova Scotia, had any permits for the Aureus East property on Nova Scotia’s Eastern Shore (which the company website mistakenly places in “northeastern Nova Scotia.”)
The reply came back from Nova Scotia Environment that Aurelius has no active environmental or industrial permits for the mine property, as the Examiner reported on March 17.
Spokesperson Barbara MacLean told the Examiner that an Environmental Assessment (EA) Approval had been issued to Gerald McConnell, then president of Dufferin Resources Inc., on June 13, 1994, nearly 27 years ago. MacLean explained that the EA does not appear online because it predates Nova Scotia Environment’s electronic database.
The company has not made an application to the department to transfer the EA to Aurelius. Approval is required by the department to transfer an EA. In other words, Aurelius does not have an active and valid environmental approval for the mine, despite what it says about the mine being “permitted.”
The company does not have an active or valid Industrial Approval, it expired on September 13, 2017. No mining activities can occur without an approved EA and IA. The department has clarified these requirements with the company.
According to Mining Data Online, the previous owner of the Dufferin property was Resource Capital Gold Corp, which had acquired the property in 2016. It then rehabilitated “both surface and underground infrastructure to permit resumption of mining,” but went bankrupt in 2018, after which the mine went into “care and maintenance.”
In 2020, Aurelius acquired the property, which had been known as the “Dufferin Gold Project or East Dufferin,” when it acquired 2672403 Ontario Corp. It then changed the name to Aureus East.
However, as Nova Scotia Environment and Climate Change told the Examiner, Aurelius did not apply to have the mine’s Environmental Assessment transferred, and the Industrial Approval had already expired when Aurelius bought the property.
And to assume that after Nova Scotia Environment “clarified these requirements with the company,” as it told the Examiner it would in March, the company would remove this false claim from its public presentations was, it turns out, a bad assumption.
An “interested investor” recently contacted the Examiner to say he was “intrigued” by the March article, and he pointed out that Aurelius Minerals’ corporate presentation in April still claimed that its Aureus East property was one of “only two Permitted gold operations in Nova Scotia.”
The online media outlet Proactive Investors has also been busy repeating the company’s claim.
Proactive Investors pushes the narrative
On March 4, for example, Giles Gwinnet reported for Proactive Investors (a website that discusses investment) on Aurelius Minerals’ “four assets in mining-friendly Nova Scotia.” Gwinnet wrote:
These assets include the Aureus East mine, which has a 300 tonne per day (tpd) mine and mill — one of only two permitted gold mines and mills in the Canadian province. The company also has the Aureus West, Tangier and Forest Hill properties.
On March 9, Proactive Investors was at it again. This time it was Alistair Ford, penning a glowing feature about how Aurelius Minerals “could end up following in the footsteps of Atlantic Gold, by proving up a multi-million ounce gold resource in Nova Scotia,” with its “highly attractive exploration portfolio.”
Aurelius CEO Mark Ashcroft told Ford, “We want to be the next Atlantic Gold.”
Ashcroft continued, “That’s an operation that has all-in sustaining costs of around US$750 per ounce, and produces around 100,000 ounces per year. It shows that Nova Scotia is a destination where it’s possible to do things.”
And lest investors think this is just whistling in the dark, it’s worth noting that some pretty big names agree. Sprott Resource Lending is a prominent name on the Aurelius share register, alongside Northfield Capital and Dundee. The company’s management also owns a significant stake.
Ford noted that gold has been known and at times mined in the area around the Aureus East property for “over a hundred years,” and then went on to repeat the claim that the company has permits in place for the mine and mill:
Legacy work explains why Aureus East is already permitted for a 300 tonnes per day mill and mine, and could theoretically, from a bureaucratic perspective, be switched back on tomorrow.
And yet, any claim that the property is “already permitted” and “could be switched back on tomorrow” is indeed akin to “whistling in the dark.”
The misinformation persists
On March 23, I wrote to Proactive Investors reporter Giles Gwinnet to draw his attention to the Halifax Examiner article in which a Nova Scotia Environment spokesperson refuted the claim about the Aureus East gold operation being “permitted.” There was no reply. Perhaps no one at Proactive Investors reads — or pays any attention to what they read in — the Halifax Examiner, even if it’s a quote from a provincial government spokesperson. For whatever reason, they continue to propagate the misinformation.
Most recently, on May 17, another Proactive Investor story, this one written by Sean Mason, again parroted the claim that the Aureus East mine is “one of only two permitted gold mines and mills in the Canadian province.”
Aurelius itself has still not corrected the misinformation. A new corporate presentation dated May 18, 2021, makes exactly the same claim on page 5, and a similar one that it has a “Permitted Gold mine and mill in Nova Scotia” on page 8.
What do the regulators say?
The Examiner wrote to Nova Scotia Environment and Climate Change on May 14 to ask if Aurelius had perhaps applied to transfer the Environmental Assessment, or begun the process of applying for a new Industrial Approval, and also to find out if the department could apply any sanctions if a company makes false claims about permitting.
Spokesperson Barbara MacLean replied on May 18:
There have been no changes since our last response in March. While there are no sanctions for making false claims about permits, the department will be following up with the company again to ensure they are aware of our requirements.
The Examiner also contacted the Nova Scotia Securities Commission (NSSC) with questions about what happens if a company issues incorrect information to investors.
NSSC spokesperson David Harrison replied that Aurelius Minerals is a TSX-Venture-listed company, and “not a reporting issuer in Nova Scotia.” He said that the principal regulator for Aurelius Minerals is the British Columbia Securities Commission (BCSC), adding that, “The Nova Scotia Securities Commission also provides assistance to other commissions like the BCSC, as necessary and desirable to protect investors.” Harrison continued:
In this situation if it were a Nova Scotia reporting issuer the corporate finance department at the Nova Scotia Securities Commission would review the matter. If staff of the corporate finance department have any concerns, they would contact the company and request the issuer to restate and refile continuous disclosure documents and issue a press release to the public. If the issuer does not comply with staff’s request, the matter may be referred to the enforcement branch.
The Halifax Examiner then contacted the British Columbia Securities Commission, with these questions:
- Are there any sanctions or actions that the British Columbia Securities Commission takes when a company makes incorrect claims to investors?
- If so, what are the possible sanctions or actions?
- In this case of Aurelius saying to investors that its gold operations in Nova Scotia are permitted when they are not, would the BC Securities Commission consider taking any of these actions?
BCSC spokesperson, Brian Kladko, replied:
Like most North American securities regulators, the BCSC operates on a disclosure-based system, in which issuers must provide timely, accurate information about material facts and risks so investors can make informed decisions. If the BCSC has reason to believe an issuer’s disclosure is materially inadequate or inaccurate, it could seek more information from the issuer to decide whether the issuer needs to file amended disclosure.
Kladko pointed to possible sanctions that could result from an administrative enforcement proceeding, detailed on the BCSC website, which states:
If a panel of the British Columbia Securities Commission decides that an individual or company committed securities misconduct, it can impose financial sanctions and prohibitions from participating in the market. These sanctions are aimed at deterring future misconduct by the respondents, and by anyone else who might be tempted to violate securities laws.
Any individual who has been sanctioned by the commission is listed on the BCSC’s website.
Kladko did not reply to the specific question about Aurelius Minerals’ claim that its Aureus East property in Nova Scotia is a permitted gold operation, saying only:
To protect the integrity of its oversight of B.C.-listed issuers, the BCSC does not discuss internal deliberations on the adequacy of an issuer’s disclosure, or whether it has made inquiries about an issuer’s disclosure. Nor does the BCSC discuss the findings or outcomes of such inquiries, unless it leads to formal, public action, such as a cease trade order or an administrative enforcement proceeding.
And what does Aurelius say?
The Examiner wrote to Aurelius Minerals on May 14, and then again on May 19, to ask:
- Has Aurelius applied to transfer the EA, and if so, has the EA been transferred to Aurelius for this project?
- Has Aurelius applied for a new IA [Industrial Approval]?
- If so, how long do you estimate the EA transfer and IA application will take?
- If not, why do you state in your presentation that the project is one of only two permitted gold operations in Nova Scotia?
This article was ready for publication on May 21 when CEO Mark Ashcroft replied, with profuse apologies that because of COVID, the emailed questions hadn’t been read earlier.
He didn’t reply to the individual questions. Instead, he provided a lengthy statement that contained a fair amount of information already covered in this article.
Aschcroft said that Aurelius’ goal “is to define a gold resource at the project,” and “to become a gold producer.” He wrote:
The reality is anything we would look to do, even an absolute restart under exactly previous terms, will require consultation with the government agencies to ensure compliance to all rules and regulations. These processes, as you know, take time and involve input, which we agree with completely. The existing permits and approvals put us further ahead of a greenfield, or ‘new’, exploration project, but we are still subject to government oversight and regulation.
Since acquiring the project in February 2020, we have been working with the relevant government departments on the transference of the Environmental Approval (“EA”) and Industrial Approval (“IA”) for our Aureus East Project in Nova Scotia. It is a detailed process at the best of times and the process time has certainly been impacted by COVID-19. We are waiting for the issuance of an Easement Letter (submitted with final signature in September) over a portion of the currently built, and used, road that accesses our property. Our expectation was the issuance would have then permitted the transference of the EA and IA. This is the same road the various government departments use to access our property for inspections, visits, etc., including the Mines Inspector (Dept of Labour), Dept of Lands & Forestry (Geoscience Branch), etc. We have been required to conduct a survey utilizing historical benchmarks.
In its correspondence with the Examiner, Nova Scotia Environment clearly contradicts Ashcroft’s assertion that Aurelius has been working on the “transference” of the approvals for Aureus East, saying that no application has been made for the transference of the EA, and that the IA has expired.
Again, I need to reiterate that we are an exploration company and would need to define a mineral resource before we could consider extracting mineralized material. We have the benefit of learning from previous operators and their actions and are not inclined to make the same mistakes. Right now, we don’t have a current mineral resource; there is no mining operation to restart.
But there’s something else that Aurelius doesn’t have right now, namely the environmental approval and industrial approval for its Aureus East mine property.
So until Aurelius does have those permits in place, perhaps it should stop saying that the company “holds” them, and that both “remain in place and valid.”
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So what is their end game Joan?
Why do you think BCSC is not acting?
A quick look at their website shows impressive looking
people running the show out there with the Chair and CEO being the former Chief Enforcement officer.