ASCENDANT’S NEW CREATIVE 3RD QUARTER REPORTS
It’s best to start by pointing out that Ascendant’s 3rd quarter financial report report is unaudited. There is no sign anywhere of an auditing firm taking responsibility for it. This helps to understand what follows.
Regarding the Management and Discussion section of the report, it can be summarized as an excersise in ommission. Here’s why:
Losses and more losses. 7.8 million dollars spent during the first 9 months of 2007. Total losses since November 2004, 17 plus million. This merits a bit of analysis. All this money raised from Canadian investors and, after 3 years on the scene, the company can’t even get their Environmental Impact Study approved for Junin, their nest-egg concession? Unfortunately, Canada seems to be an unending source of easy money to keep funding dead-end projects.
The list of omissions and misinformation is a bit too long to go into detail, but let me present some of the more galling ones:
SUSPENSIONS: The company says that work has been suspended… but what it doesn’t tell you is that, on September of this year, it was ordered by the Ministry of Mines and Petroleum to halt all of its activities in the Junin project. There is no timetable at all for the company resuming activities, if it is even ever allowed to do so.
Mining or Agriculture?. Some of you out there may be confused by the following statement made on page 10 of the report:
The Company has met with various ministers from the MMP to continue discussions of negotiations with local communities and authorize to advance the Junin project. At this time, all mining-related activities have ceased including farming until clarification and negotiations have been reached.
If you are wondering how farming could be considered a mining activity- you are not alone. It’s not, of course. And here, you thought you were holding stocks of a mining company! Too, there is no negotiations going on at all with communities because the company was ordered to cease all of its activities, including negotiating with communities (which could be seen as public relations activities).
What is more relevant to ponder is the reasons behind the drastic suspensions. Look back to our earlier blogs to discover why, especially those dealing with the violence and use of “paramilitary outfits” financed by the company against communities back in November and December of 2006…
COMPANY ASSETS AT RISK. The company is suppose to inform its investors of anything that may be a risk to the their assets. Ascendant considers 1.9 million dollars they say they’ve spent to buy land around JUNIN as assets. So, why did the company not report on the latest and devastating report from the Institute for Agricultural Development in which it found a number of illegalities connected to 18 of properties held by Ascendant around JUNIN? The INDA investigation and report was prompted by accusations from the nation’s Anti-Corruption Commission, regarding illegalities with these properties, and it called for the properties to revert back to the state. The INDA report confirmed the illegalities, and identified some new ones.
Among the findings was that the overwhelming majority of the properties in question had primary forests on them, and were completely unsuitable for agricultural use (which is the only land INDA is allow to adjudicate). In the past, Gary Davis has said that the company’s concessions had been severely logged.
EXPLORATION ANYONE? One has to read the section on expenditures for exploration a couple of times to understand what is being said. It apparently says that during the last 9 months, the company spent 4.5 million dollars for “advancing exploration” costs. This is what the report claims:
The primary reason for the increased net losses for the 2007 periods compared to the 2006 periods was due to higher expenditures on exploration and in particular on the Chaucha property.
Yet only 1.57 million, of the 4.5 million dollars for exploration was actually spent on exploration activities; and this on its Chaucha property (did anyone wonder why this time they did not report on the exploration results from Chaucha?). No exploration activity whatsoever has been undertaken in JUNIN, and they do not reveal what they spent the other 3 million dollars on, except to point out that they’ve spent $250,000 for preliminary exploration at Telimbela (but they fail to inform if the company has a legally approved Environmental Impact Study for exploration at this site- which is not even theirs) [this is still an improvement over the outrageous claims of millions of dollars spent on exploration activities in Junin in prior reports)
Very strange. But not as strange as the following:
On page 8, the two directors responsible for the report claim that:
On November 27, 2006 the Company entered into an agreement with the Organization for the Development of Intag, Parish Council of Garcia Moreno and the Women’s Association of Garcia Moreno, representing over 90 local communities in support of Junin development…
Here’s what they didn’t tell you:
The agreement with the Parish Government of García Moreno was legally annulled by the full Parish Government (not council) 8 days after it was signed. This was mostly due to the use of paramilitaries against Garcia Moreno communities. There are around 15 women’s groups in Intag: 14 of those oppose Ascendant’s presence in Intag. Furthermore, the legal document annulling the agreement with the company also discredits the Organization for the Development of Intag, saying it does not represent anyone, much less the 90 imagined communities “in support of Junin development” (Junin development is pretty vague, you have to admit)
But beyond the question as to the meaning here, there aren’t 90 communities in Intag. And if they want you to believe that those 90 non-existent communities are in favor of the mining project, it would be a gross lie, even if they did exist. After all the accompanying violence generated by their presence, they’d be hard put to prove that even 10 communities in Intag support the company’s mining project.
An interesting and very relevant piece of information to the company’s incredible claim regarding the presumed support, is that all seven local governments in Intag, as well as the Municipality of Cotacachi and Imbabura’s provincial governments have all publicly expressed their rejection of the mining project. This is easy to prove, since these governments have signed documents expressing their rejections. Where are the signatures of the legal representatives of the 90 ghost communities supporting Ascendant’s version of development of Junin?
There’s a lot more of questionable things, like the very high costs of telecommunications (average $ 10,000 per month), or the unbelievable high rents, and so on. But, we’ll save this for another time. For now it’s enough to note the disparities pointed out above, and to keep in mind that:
· After 3 years of Ascendant’s presence in Intag, no exploration has taken place in Junin
· Ascendant is not allowed to carry out any activities whatsoever within its Junin concessions
· The company has not resubmitted another environmental impact study after their last one was rejected nearly 12 months ago by the government
· The company is seriously at risk of losing at 18 of its properties around Junin
· The latest government report confirmed the presence of primary forests in the Junin mining area- something the company has denied in the past. Cotacachi’s Ecological Ordinance prohibits mining in primary, or native forests.
· Water: This week IAMGOLD lost 30% of their concessions because its Quimsacocha project threatened streams, rivers and lakes. The Toisan Range, where the Junin concessions are located, is also exceptionally rich in pristine water resources. IAGOLD’s land will be turned over for public use and conservation purposes; the first of many such concessions revokations to come
· The mining area is also rich in archeological sites. Ecuadorian law prohibits mining in these areas.
· The opposition from all local governments, communities and NGO’s is still as firm as ever
It’s no wonder the company is looking to distract attention from its woes in Ecuador by buying non-producing mines in the US!
DECOIN 16 November 2007