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<br />L<Jj>ana<.; O? <""'D/111111C;--"'/ U""" <br /> <br />In addition to its other problems, Galactic had <br />attracted the interest of the U.S. Securities and <br />Exchange Commission, which questioned the <br />company's claims about the amount of gold at <br />Summitville. <br /> <br />Roger Leonard, the mine manager, had taken issue <br />in 1986 with a press release, signed by Friedland, <br />that claimed vast, untapped reserves at <br />Summitville. <br /> <br />Leonard called the press release "misleading" and <br />"just plain wrong." <br /> <br />He said he voiced his complaints at the time to Ed <br />Roper, the company's mining expert, and to several <br />other executives, but not to Friedland. Leonard said <br />Roper told him to "shut up about this." <br /> <br />A few months later, Leonard was fired. But that <br />didn't silence the warnings. Other executives and <br />outside consultants also said the company's claims <br />could not be substantiated. <br /> <br />That was what the SEC concluded, and the agency <br />forced Galactic to alter its claims in literature <br />circulated to investors. <br /> <br />By December 1991, just over a year before Galactic <br />declared bankruptcy, the company had recovered <br />294,364 ounces of gold at Summitville. That was far <br />less than the 547,190 ounces predicted in the <br />business plan Galactic had submitted to the Bank <br />of America in 1985. <br /> <br />Further, the gold was worth less than predicted <br />because the market was depressed. <br /> <br />In the late 1980s, gold prices hovered below $400. <br />Galactic had hoped prices would climb back to the <br />1980 level, when gold sold for more than $600 an <br />ounce. <br /> <br />Prices did rise slightly and the mine broke even in <br />1987, but even that "was done with accounting <br />tricks," Wyman said. <br /> <br />Friedland continued to believe the price eventually <br /> <br />http://www.denver-rmn.comlnews/0507 smmt I.shtml <br /> <br />5/7/00 <br /> <br />