Red Pine Exploration is pointing the finger of blame at its former CEO, Quentin Yarie, for inaccurate drill core results that forced the gold exploration company to retract all of its assays from its Wawa Gold Project.
Yarie, who stepped down as CEO in February, was not mentioned by name in a May 10 company news release. The Globe and Mail confirmed it was Yarie in an interview with interim CEO Paul Martin.
The Toronto-headquartered junior miner said the matter is being referred to the Ontario Securities Commission. Legal action is also being considered.
Earlier this month, Red Pine retracted all of its publicly disclosed assay results after “inconsistencies” were discovered in some the assays recorded in the company’s database that factored into a mineral resource estimate.
The drill results extend back to 2014 when Red Pine acquired the Wawa project, located two kilometres south of the community of Wawa.
In the news release, Red Pine said its internal investigation revealed these inconsistencies stem from “the unauthorized manipulation of certain assay results” by the former CEO after they came back from the assay lab.
In examining the chain of custody in the drill core assay results, Red Pine contends it has determined that the correct results were emailed by Activation Laboratories (ActLabs) to Red Pine, but addressed only to the CEO.
The company claims the manipulated assay results, from the spring of 2015 to Jan. 30, 2024, were sent by the former CEO to Red Pine staff to be downloaded into the company database, which were used in various ways, include calculating the gold resource estimate for the Wawa Gold Project at 700,000 ounces of indicated and inferred gold.
The difference between indicated and inferred resources is the scale of the degree of confidence in the amount of minerals in the ground to be mined economically with indicated being higher and inferred being lower.
The company said its findings further revealed that 523 out of 98,000 drill core assay results in the database were manipulated by the CEO.
Red Pine had issued an earlier news release on May 6 that it stands behind the work of ActLabs.
Ongoing drill results and published resource estimates had constantly been communicated to the public and shareholders via news releases and other disclosure documents.
The inconsistencies were discovered by staff on April 29. The board chair was alerted April 30 and a subsequent board meeting called. That immediately sparked an interview review, which revealed “multiple instances” of changes made in the assay results.
A news release announced the retraction of all drill results on May 1 prior to the start of the trading day, with the company saying the posted drill results and mineral estimate could not be relied upon as accurate.
An updated gold estimate was due out in this year’s third quarter.
Red Pine said the investigation is continuing to determine the financial impact on the Wawa project. WSP Global has been hired to oversee an independent verification process of all the assay results from 2014 to the present.
Red Pine stock, which still remains active on the TSX-Venture exchange, stood at $0.085 at the end of trading on May 10.
Company management said it hopes to provide an overview of the evolving situation with a press release issued prior to the opening of the market on May 15 and a conference call later in the morning.
The Wawa Gold Project is located in an area that was historically mined for gold going back to the 1800s. Red Pine had been drilling on a regular basis, in and around two deposits, since acquiring full ownership of the project three years ago.
The exploration program had been bankrolled by Alamos Gold in 2020 and last year by Franco-Nevada.
