Overview
We are a group of Activist Shareholders. We are
seeking legal representation and assistance in filing a lawsuit that
alleges violations of the:
Securities
Act of 1933 and
Securities Act of 1934
You
(the Attorney) will be paid an hourly rate to prepare and file the
case. We are not
asking for contingency work in the initial
(smaller) lawsuit to be filed in the United States.
This
initial lawsuit does not have to be a class action.
The case has mostly been laid out for you (see below). We
want to build a limited case that target several easily proven
violations of Securities Laws. The case needs to be designed
to survive all “motions to
dismiss”.
The size of a possible judgment is a secondary
concern. Putting together a case
in the next 30
days is more important to us.
The shareholder website will be a resource for you in your
research. This website has been in operation for over 2
years, and has received approximately 10,000 unique visitors (over
60,000 “hits”).
Hundreds of pages of evidence
documented here (and on the "Serious" message board):
We want to target New York Courts for our filing, but we do not yet
understand the differences between the different venues (State,
Federal, which district?). If a “pit
bull” Attorney from another State can recommend a different
venue or strategy, please do contact us.
Several of the lead Plaintiffs reside in the United States, and bought
shares on the United States exchange. Other likely plaintiffs
reside in Canada and in the Netherlands.
We will “be back for more”. A very large
“Breach of Fiduciary Responsibility” case is
percolating in the background, but that case may need to be filed in a
Canadian Court.
This is just our first chess move. Our next legal move will
depend on what happens after our first case is filed.
If you work with us, and prove your value as legal counsel, you will
have an opportunity to be involved in the larger case we are
planning. The larger case will allege that many
outside firms (Investment Houses, Auditors, etc.) were involved in the
scheme.
The larger case will probably be a class action.
Overview of the Defendants
Campbell Resources is a Gold and Copper Mining company with proven Gold
and copper reserves, and 4 mines already built.
We would like to file against the Executive Management Team and Board
of Directors of Campbell Resources. All executives
and Directors serving between 2006 and 2008 will be named.
After raising over $100 million dollars in private placements from 2000
– 2008, the company has collapsed. The mines are shuttered
(and hundreds of workers laid off). Some of the plaintiffs
(our shareholder group) participated in the private placements
This case alleges “Downplay”. This is not
a case of exaggerated statements suggesting huge potential that was
never realized. The broader allegation is that a Cabal of
Insiders and financial Instituonasl know what really lies in the
ground, and was trying to “steal” these assets by
various mechanisms, before the marketplace could assign accurate and
fair prices.
The company incorporated the false and misleading statements in
numerous SEC quarterly and annual reports in the period. The
most obvious omissions occurred as part of the 2006 Prospectus
Offering. But false statements were melded in with
every other company statement that described the assets and operations
of the company.
The company is now in Canadian Bankruptcy protection (CCAA), and has
started the process of selling assets. There are
far more assets than debts here. Complete
liquidation would be a favorable outcome but only if it was handled in
a fair, "open market", transparent manner.
Total
debt of the company is about $60 million.
Total assets are between $200 million
and $600 million
There are far more assets than debt here (hundred of millions of dollars).
If
the company is liquidated in a fair and transparent manner,
shareholders would be entitled to receive payouts in excess
of 50 cents a share (in the Authors opinion).
The current share priced is under one penny
($0.01). Trading symbols are at the bottom of this
page.
The stock traded on the United States “over the
counter” (OTC) during the period. All financial
statements were filed with the SEC, and contained Sarbanes Oxley
compliance statements. (Trading symbols
are listed at the bottom of this page)
Company entered CCAA
(Canadian restructuring) in 2005.
They emerged from CCAA in 2007.
Company reentered CCAA in 2009.
Covered under United States disclosure law the entire time
Company is domiciled in Montréal, Canada. Operations are in
Northern Canada. Local groups in Northern Canada are
following this story closely, and they visit the website with great
frequency. We would like all of them to have their jobs back,
and liquidation (a new owner) would lead to that.
The behavior that we allege has been seen at all 4 mining properties in
the 2006 – 2009 period. That’s too much
of a coincidence: the same pattern played out at all 4
properties at the same time. Trouble at one mine is a
possibility. Trouble at 4 mines at once is a grand deception
(in our opinion).
The
Allegation (basis of our lawsuit)
We allege violations of Unite States Securities Law
http://topics.law.cornell.edu/wex/securities_act_of_1933
(Section 11 and section 10b-5)
http://topics.law.cornell.edu/wex/securities_exchange_act_of_1934
http://www.law.uc.edu/CCL/34ActRls/rule10b-5.html
We allege that the company deliberately disseminated Technical reports
that downplayed and omitted earlier findings. These reports
painted the picture that describes the value of the Mining properties
(and the profit potential). But numerous material
facts were omitted from these reports.
The most pertinent example of this was the 2006 Copper Rand Technical
Report, which was presented as a complete picture of the Copper Rand
mine in Chibougamau Québec. This report made no
mention of two earlier Feasibility studies on the mine. The
first of these studies in 1997 documented that the mine would provide a
17% investment rate of return with a gold price as low as $300 per
ounce gold.
The Plaintiffs understand that operating costs have gone up with
inflation. But when a mine is proven to be profitable at a
gold price of $300, and then cannot be operated at a profit with a gold
price of $1,000, there has be fraud or deception involved.
The scenario was enabled by the fact that partner Nuinsco Resources
(who's Executives have admitted to being in a conflict of interest
position) were running Mining Operations.
This scenario is aggravated by the fact that when shareholder have
asked (in writing) for an explanation of the variance, the CEO has
effectively laughed in our faces, and refused to answer with any
serious intent.
Management has made deliberate efforts to suppress this data, and deny
that the report exists. When CRSA members sentry a written
request to the CEO in (approximate date) 2007. We asked for a
copy of the 1998 Feasibility study. Management sent us a
1,000 page document through overnight mail.
But the document was in French and was unreadable because it was just
raw data. There was no summary data
included. It is a certainty that this summary data
was presented to an earlier group of shareholders (it says so in a
press release).
This was a deliberate attempt to omit key data. It was
absolutely clear that shareholders war seeking to research earlier
findings, but Management omitted data in order to render our research
efforts un-fruitful.
So the company omitted key data in their published reports, and than
made a conscious effort to omit key summery data, even after
shareholders requested a copy of the report. (Violation Rule
10b-5)
The earlier findings were 2 independent Feasibility studies that proved
that the Copper Rand Mine could be operated with massive cash profits
even with gold prices as low as $300 an ounce.
Campbell’s early shareholders paid for these studies to be
produced (payment was out of company finds / shareholder equity). Yet
management has made a deliberate effort to suppress and deny these
earlier findings.
The 2006 Technical Report omitted 1 or 2 entire areas of the Copper
Rand mine. These are known as “horizon 3”
and “horizon 4”. The Technical
Reports was portrayed to the public as an accurate picture of the value
and production capability of the mine. But the
omitted all of the data (data already seen in SEC filed press
releases), that would document the Copper Rand mine as a mine that
should absolutely, without doubt, be generating massive profits at
today’s gold prices (if operated with honest intent).
One piece of evidence we have is that the company had actually operated
the Copper Rand mine at a huge profit in 2005, with gold prove of well
under $500 an ounce, and a copper price of around $1.20 per
pound.
The very next quarter, AFTER a group of outside Financiers got
involved, the profits disappeared, production costs soared, and
production turned unprofitable, all the while private placements were
being announced and the shares were being diluted.
Management refuses to explain the gross variance we have seen (more
omissions).
How could a company that was producing so many disappointments in
quarterly results find their numerous private placement offerings so
quickly filled up (within hours). Several placements were
oversubscribed and needed to be expanded (right after
“another quarter of bad results”).
We allege that the story being communicated to these Institutional
buyers was completely different from what retail shareholders
heard. A grand deception (Rule 10b-5).
The company suppressed their own (earlier) data that presents a very
favorable picture of their mining assets. Instead they have
tried to present a picture that is much downplayed, far less promising,
and has actually contributed to their current status in bankruptcy
reorganization.
The company's own press releases document that the Copper Rand mine has
at least 1 million ounces of gold in the ground (at mine levels already
developed). Production costs for this gold would
effectively be zero, because the Copper Rand ore also has a high copper
content, and the copper production can cover the costs.
The Copper Rand mine has at least $1 billion of “gold in the
ground” and hundreds of million of dollars of
copper. We allege that the mine is worth hundreds of million
of dollars (upward of 50 cents a share – the shares trade at
a penny right now) if it were to be sold in an open market
transaction. But only if the mine was valued based on the
Proven Feasibility studies, not the “Mickey Mouse”
handicapped operating results from the last 3 years.
Over 300,000 ounces of this gold is in the Proven Reserve
category. Proven Reserves (with a Feasibility study) cannot
be dismissed on a whim. They hold the highest level of economic
certainty in Project planning, and the numbers were derived by
Independent Geologists and experts.
We allege that one game the company has played was to have a bad
quarter, "broken equipment" one quarter, some "ground
shifting” another quarter, and then make the blanket and
deceptive statements that "the mine cannot be operated
profitably. We allege that this is a deception.
As additional proof, look at who was really running Mining Operations
during the period: Mine Operations were managed by
Nuinsco Resources; a partner firm involved in several highly suspicions
transactions with the company. Two of Nuinsco's top
Executives sat on the Campbell Board of Directors from 2006 –
2008.
Management has put forth these “pessimistic
results” as an accurate representation of the potential of
the mines (results from Copper Rand and Joe Mann). But the
results contradict all earlier SEC filings and press releases, in very
blatant ways.
We allege that Management and the Board mislead shareholders, and the
investment community. We allege that Nuinsco (with Campbell
Management and Board knowledge) schemed to present an artificial
negative and pessimistic picture.
Right
now, the company has removed any reference to the Copper Rand
mine from their website.
Under the oversight of the Court Monitor (Raymond Chabot Grant
Thornton), the company has now circulated a “for
sale” sign for the mining division that owns Copper Rand
mine. In a most shocking omission, the company omits
reference to the Copper Rand mine in describing the mining division
that owns the mine.
Oopps! The mine, with over $300 million in gold in the ground
(proven reserves), has now officially disappeared! The mine
is not even discussed on their website, or in the “for
sale” advertisements.
This is all happening up in Canada. Canadian law covers these
transgressions.
But
we allege that, under United Sates law, numerous violations of the
Federal Securities Acts (1933 and 1934) have occurred and are occurring
right now.
Omissions:
Corner Bay Mine
In the 2006 Technical Report, the company omitted key data internal
data that showed the operating costs at Corner Bay would be well under
$1.00 per pound copper. This can be proven because
the company was “selling forward” copper from the
Corner Bay mine in the late 90’s at a price of under $1.00
per pound.
Independent experts would also verify our “costs of under
$1.00 per pound” statement. The mine is open pit,
shallow depth, with copper grades of over 5% copper.
In the 2006 Technical Report, the company omitted data showing that the
Corner Bay actually has a gold content that is materially
significant. The gold content could be higher at the deeper
depths, and there is a mine immediately next door where very high
grades of gold have been found. The company omitted all
references to these findings the 2006 reports.
In the 2006 – 2008 time frame, the company issued numerous
press releases and report that stated excepted operating costs of the
Corner Bay mines. These statements were made in a deceptive
manner. Operating costs as high as $1.79 per pound copper
were presented to shareholders. We allege that these numbers
can be shown to be a gross exaggeration and deception.
Omissions
and Misleading Statements: Joe Mann mine
The 2006 Joe Mann Technical Report omitted key (favorable)
data. The report failed to discuss the development
work done in earlier years, where numerous projections of 60,000 ounces
of gold at a cash cost as low as $245 an pounce were presented.
In one early private placement, local Canadian Investors invested over
$10 million to develop a new level of the Joe Mann mine. This
investment was based on very favorable data showing low
costs. The company has omitted that data in reports
since 2006 (as the mine was shuttered).
In the 2006 Technical Report, the Consulting Geologist strongly urged
continued mining, exploration and development at Joe Mann.
Management instead closed the mine, with no credible reason given to
shareholders.
Management has employed clever techniques to portray the Joe Mann mine
as “tired old mine with few resources
left”. But earlier press releases paint a
completely different picture. Earlier press release show
massive resources (one step down from "proven reserves") that could be
mined at costs as low as $245 per ounce (over $20 - $30 million in
annual profits at today’s gold price).
All of these Joe Mann resource numbers should be in the
company’s reports. Three years ago the company
reported Joe Mann resources of 400,000 ounces of gold. The
company now lists Joe Mann as having 0 (zero)
resources.
At
one point, Campbell even put the Joe Main up for sale. The
Buyer (an outside company) wanting to buy the mine presented published
their own data on their website showing they know exactly where high
grade gold was located. They drilled a hole, and
“viola!”… They found high grade gold
results in the first drill hole. What a surprise!
If these additional areas at Joe Mann were exploited, Campbell would be
realizing an annual profit of $20 - $30 million a year right now, just
from the Joe Mann mine. Instead the mine is shuttered, and
the company is near bankruptcy.
The closing of the Joe Man mine went directly against the advice of the
Consulting Geologist (in the 2006 report). The Geologist
strongly urged continued mining, exploration and development at Joe
Mann. The company instead close the mine,
with no credible reason given to shareholders.
Other False Statements:
Rule 10b-5: http://www.law.uc.edu/CCL/34ActRls/rule10b-5.html
We have dozens of emails form the CEO of the company, sent during the
period. We believe that a review of these emails would
possibly find numerous “false statements and deceptions".
In one case, a shareholder emailed André Fortier and asked
about these earlier Horizon 3 data showing "bonanza-grade" gold
(extremely desirable in the industry). André
Fortier replied back, writing that the information (the existence of
high grade gold zones) “was a lie”. But
earlier press releases show these high grades areas (with
André Fortier’s signature on the
report).
In a recent year, Management inserted the words (into an SEC filing)
“we do not consider ourselves a gold mining
company”. These words directly contradict the
portrayal of Campbell in the 2006 Prospectus and Technical
Reports. The Auditors (Deloitte & Touche)
seem to be complicit in this instance.
Similar schemes were employed simultaneously at the Corner Bay mine and
the Merrill Island mine.
While in bankruptcy protection (the 2nd time), the CEO has made
numerous RECENT (summer of 2009) written statements like “all
we need is a $2.50 per pound copper price and he can restart production
at Corner Bay.
The copper price has been above $2.50 per pound for several months, and
the CEO has made no moves to in that direction as far as shareholders
would know – not even a positive press release.
More deception!
A
quick look at the larger “Breach of Fiduciary
Responsibility case”
In our initial litigation, we are not alleging these items listed
below. This will be part of a subsequent legal case that we
are planning. The items below will probably be a case for
Canadian Courts.
The larger allegation involves a Breach of Fiduciary Duty. We
allege that Management was motivated by a broad and sinister effort
(scheme) whereby Management, Board members (with several outside
parties assisting) shaped the landscape to allow an outside company to
take over the (buy out) Campbell and/or acquire
Campbell’s mining assets at a price far below market value.
The
allegation is that Management presented a false (severely
downplayed) picture of the company while:
The shares were excessively diluted to non-arms length market
participants.
Sweetheart deals to give up assets were concluded.
Conflicts of interest were prevalent.
The balance sheet was weakened to the point of bankruptcy protection.
The same group of “White Knights” (Nuinsco and
their friends) stepped up to help out, again and again. But
their but their real role was as player in a yet announced merger and
acquisitions scheme that would have deprived shareholder of the values
they deserved.
And (now), as company assets are being advertised for sale, Management
is still actively omitting key data, with the ostensible purpose of
allowing an outside group to acquire assets at below market prices
(Example: the Copper Rand mine is no longer even discussed on the
official company website).
The larger allegation against the company involves Management scheme to
portray the company as weak, dilute shares, and give away assets to
partner "friend" companies. The omissions and false
statements in Campbell’s reports have enabled this larger
scheme to play out.
Notes:
The Company is domiciled in Montréal
Québec. The main stock symbol traded with symbol
CCH on the Toronto exchange (the Canadian “big
board”) during the period.
Current Canadian symbol is CCH.H (the “Next
exchange”).
United States trading symbol during the period was CBLRF on the OTC
(over the counter) exchange.
Current symbol is CBLRF.pk – it has moved to the U.S. pink
sheets)
Campbell stopped filing financial reports in 2009.
Research
Links:
Shareholder website (numerous links to press releases)
http://www.campbellanalysis.com/
(This website has received over 10,000 unique visitors since 2007)
2004 Company slideshow
that we acquired.
http://www.campbellanalysis.com/files/Campbell%20Investor%20Slideshow%20(Powerpoint%20file).ppt
Note (on slide #18) that the profit projections were with a gold price
if $400 an ounce and a copper price of $1.00 per pound
copper. Today’s gold price is more than double (at
close to $1,000 an ounce). Today’s copper price is
almost triple. It is an
“impossibility” that these same mines would not be
profitable at today’s metal prices.
Interview with
André Fortier (CEO).
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=58840&tid=47&mid=47&tof=42&frt=2