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Friday, 22 February 2013
Great Western Minerals says former project director arrested after internal investigation
Great Western Minerals Group (CVE:GWG) says that as a result of an internal investigation into the activities of former project director Vincent Mora, suspicions have been raised about invoicing, purchasing and contracting, and have led to the ex employee's arrest.
Because irregularities were found during the company's review, Great Western said it filed a complaint and cooperated with the South African police to investigate the possibility of criminal activity.
The company, which is now conducting a review of compliance with its internal controls, said that police have now arrested Mora on suspicion of fraud and money laundering.
Last November, Great Western terminated its contract with East Rand Engineering Services for the refurbishment of its Steenkampskraal mine in South Africa due to an investigation.
The company paid East Rand around C$10.62 million so far out of an invoiced amount totaling around $13.32 million. It said it is assessing the works of East Rand, and is pursuing all available options, including the start of civil claims to recover any damages that may have occurred.
"GWMG will pursue every legal avenue available to recoup any losses that may have arisen through this situation. We will continue to assist the police in their investigation of the criminal acts that have violated the trust of the company," said president and CEO Marc LeVier.
Great Western has announced a series of management additions and changes in recent weeks in preparation for a new stage in the life of the company, as it aims to become a fully integrated rare earth producer.
Currently, the company is a rare earth processor, whose specialty alloys are used in the magnet, battery, defence and aerospace industries. Its development program at Steenkampskraal is central to ensure a strong flow of feedstock for its downstream processing - the company intends to be one of the first to produce significant quantities of the more valuable heavy rare earth oxides, which are important materials for alloys.
Last month, it released an updated NI 43-101 compliant resource estimate at its Steenkampskraal project that showed indicated resources rose by more than double from the report last May, while inferred resources more than tripled.
"Steenkampskraal remains a great project with one of the few real opportunities to be a leader in the rare earth sector," asserted LeVier.
"Our plans to become a vertically integrated mine-to-market company, with unique market access, continue to guide our efforts. We have great employees, with high levels of integrity and values, with whom we will continue to build a team of excellence and the actions of a few persons should not reflect upon the rest of our team.
"GWMG has the ability to deliver the Steenkampskraal project and we will do so as we build a relationship of trust with our investors."
Great Western added that because the matter involves an ongoing criminal investigation and civil matter, it will not be able to provide additional information at this time.