TSX Venture Symbol: GWG
SASKATOON, Feb. 21, 2013 /PRNewswire/ - Great Western Minerals Group Ltd. ("GWMG" or the "Company"), (TSXV: GWG) today announced that as a result of an internal investigation into the activities of Vincent Mora, who had previously provided services to the Company as Project Director and was terminated for cause, suspicions were raised about invoicing, purchasing and contracting activities. Because irregularities were found during the Company's review, GWMG filed a complaint and cooperated with the South African police to investigate the possibility of criminal activity. As a result of this investigation, police have arrested Vincent Mora on suspicion of fraud and money laundering.
GWMG, through its South African legal counsel, has been actively engaged in assisting the South African police with the criminal proceedings and is completing the Company's full assessment of the nature of the activity that took place. The Company is also conducting a review of compliance with its internal controls.
Investigation into the activities of East Rand Engineering Services ("ERES"), the contractor that was awarded the earthworks and mine refurbishment contract, led GWMG to terminate its contract with that company (see GWMG news release November 26, 2012). The Company has paid ERES approximately C$10.62 million to date out of an invoiced amount totaling approximately C$13.32 million (exclusive of VAT). The Company's quantity surveyors and engineers are assessing the completed and partially completed works and GWMG is pursuing all available options, including the commencement of civil claims, to recover any damages which may have occurred.
GWMG President and Chief Executive Officer Marc LeVier said, "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."
Mr. LeVier went on to say, "Steenkampskraal remains a great project with one of the few real opportunities to be a leader in the rare earth sector. 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."
Because this matter involves an ongoing criminal investigation and civil matter, the Company and its spokespersons will not be able to provide additional information at this time.
Great Western Minerals Group Ltd. is engaged in becoming an integrated rare earth producer. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company's wholly owned subsidiaries Less Common Metals Limited in Ellesmere Port, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain transition metals including nickel, cobalt, iron and rare earth elements. As part of the Company's vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which controls the Steenkampskraal Monazite Mine. In addition to an exploration program at Steenkampskraal, GWMG also holds interests in four rare earth exploration and development properties in North America.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to, risks associated with the uncertainties inherent in litigation and civil proceedings, including uncertainties regarding the ability to prove any claims, the estimation of potential damages and any possible recovery thereof; uncertainty of resource estimates, in particular those relating to Inferred resources; risks relating to estimating grades, in particular where interpolation is used to estimate grades; the successful and timely completion and the results of its preliminary economic assessment of the Steenkampskraal project; the construction, commissioning and operation of the proposed monazite processing facility and separation facility and mine refurbishment activities; the adequacy of the Company's financial resources and the availability of additional cash from operations or from financing on reasonable terms or at all; reliance on third parties to meet projected timelines and commencement of production at Steenkampskraal; risks related to the receipt of all required approvals including those relating to the commencement of production at the Steenkampskraal mine, delays in obtaining permits, licenses and operating authorities in Canada, South Africa and China, environmental matters, water and land use risks; the successful and timely completion of its preliminary economic assessment at Hoidas Lake; risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans; health and safety risks; uncertainty of estimates and projections of production, costs and expenses; risks that future Hoidas Lake or Steenkampskraal and region exploration results may not meet exploration or corporate objectives; political risks inherent in South Africa and China; risks associated with the relationship between GWMG and/or its subsidiaries and communities and governments in Canada and South Africa, radioactivity and related issues, dependence on one mineral project; loss of, and the inability to attract, key personnel; the factors discussed in the Company's public disclosure record; and other factors that could cause actions, events or results not to be as anticipated. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. Except as required by law, GWMG does not assume any obligation to update forward-looking statements as set out in this news release. The forward-looking statements of GWMG contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG's Professional Securities Market listing particulars available at www.sedar.com.
SOURCE Great Western Minerals Group Ltd.