The Canadian Panama Mining Swindle

Petaquilla Minerals chairman-CEO steps aside temporarily due to legal issues



March 23, 2005
VANCOUVER (CP) - The chairman and chief executive of Petaquilla Minerals Ltd. has stepped aside temporarily due to an investigation into allegations of irregularities while he was the governor of Panama's Cocle province.

The company said Wednesday that no charges have been laid against Richard Fifer, but in the interest of good corporate governance he would step aside for the time being. Fifer will continue to serve the Vancouver company in a non-executive role and will remain on its board.

Petaquilla is a Canadian-based mineral explorer focused on developing a property in north-central Panama containing copper, gold, silver and molybdenum, a specialty industrial metal.

Richard Fifer is accused of embezzelment and shady dealings in Panama, hoping to cash in on his links to the government and knowing in advance the expansion plans for the Panama Canel he suddely revives his mining company reserves in Panama exactly where the Canel is supposed to expand.

Meanwhile he is financing his Canadian based Panama Mining operations in the infamous Vancouver Stock exchange, notorious for it's insider trading and other swindles and scandals. And along comes Fifer to create another one.
See my Alberta Stock Exchange Scandal for more on the Vancouver Exchange.

If there ever was the need for a SINGLE Regulator over the five Canadian exchanges, here is another good example of why.

And of course Fifers mining operations are an environmental hazard, being a get in, get out, get rich quick scheme. Is this another Bre X in the making?

You would of course never know this from the CP story. So I have added background news on Fifer from Panama.

Panama News
Vol. 11, No. 5
March 6 - 19, 2005
Panamanian government officials, IADB used as stage props by Fifer’s company
Canadian authorities looking at Petaquilla Minerals over possible insider trading

by Eric Jackson

Petaquilla Minerals Ltd, which has an extensive but never operational mining concession for northern Cocle and western Colon provinces that may be in the way of plans to expand the Panama Canal, may be in trouble with Canadian authorities over transactions on the Toronto Stock exchange.

Former Cocle governor Richard Fifer, the CEO of Petaquilla Minerals Ltd, was charged with embezzling public funds while serving as governor of Cocle on February 4. An arrest warrant was issued and Fifer went into hiding while his lawyers sought to quash the warrant. On February 10, while Fifer was a fugitive from Panamanian justice and before there had been any mention at all about his trouble in the Canadian press, Petaquilla sold 500,000 company shares on the Toronto Stock Exchange. On February 21, a court in Cocle province cancelled the arrest warrant but not the charges, and required Fifer to report to police every 15 days and prohibited him from leaving the country.

On February 20, while Fifer was still sought by Panamanian authorities, President Martín Torrijos and officials of the Inter-American Development Bank (IADB) appeared at a ceremony in La Pintada, Cocle, to announce a $20 million contract for several projects, including improvements to the road to Coclesito.* At that event Torrijos was photographed with Petaquilla CFO Kenneth W. Morgan, and the company used that photograph and a deceptive headline to imply that the bank is supporting the company’s purported mining development. (That clipping is found on the Internet here.) In another press release about the event, Petaquilla claimed, without citing a date, that Morgan and Fifer met with the Vice-Minister of Commerce and Industry (See here.)

The Panama News asked the Presidencia and the Ministry of Commerce and Industry whether officials of the Torrijos administration had met with Fifer while he was a fugitive from justice. A spokesman for President Torrijos referred The Panama News to Petaquilla for answers to that question. A spokesman for the Ministry of Commerce and Industry said that no such meeting showed up on the ministry’s logs.

Meanwhile, this reporter contacted the Ontario Securities Commission (OSC), which oversees activities on the Toronto Stock Exchange, asking if it would have constituted insider trading for Petaquilla to sell shares on the exchange when the fact that its CEO was a fugitive from justice was undisclosed to the Canadian market.

In a delayed response to the questions from The Panama News, the OSC acknowledged the February 10 transaction, and said that "your email has been forwarded to appropriate OSC staff for further review" but added that "the OSC does not generally disclose the existence or status of a review or investigation until we issue a Statement of Allegations and the matter becomes part of the public record."

The OSC also pointed out that "[o]n February 25, PTQ responded to news reports in Panama regarding the investigation of their Chairman and CEO Richard Fifer.... [t]he News Release does not seem to have had a dramatic effect on the stock price."

From the company's perspective, continuity in the stock price was the objective. But the problem is that the Petaquilla press statement was a lie.

Petaquilla Addresses Press Reports
Distribution Source : CCNMatthews
Date : Friday - February 25, 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthe ws - Feb. 25, 2005) - Petaquilla Minerals Ltd. ("the Company")(TSX:PTQ)( OTCBB:PTQMF) has responded to news reports in Panama that Richard Fifer, Chairman and CEO of the Company, is being investigated for alleged irregularities while Governor of Cocle Province, Panama.

The Company has retained independent legal counsel in Panama to investigate the allegations against Mr. Fifer.

The Company has been informed that there are no outstanding warrant orders, charges or arrest orders for Mr. Fifer, despite what some newspaper articles are currently reporting.

The Board of Directors assures all stakeholders that it will continue to seek additional information and will act decisively and promptly if further action is warranted.

On behalf of the Board of Directors of

PETAQUILLA MINERALS LTD.

"Kenneth W. Morgan"

Kenneth W. Morgan, CFO and Director
Petaquilla Minerals Ltd.
Kenneth W. Morgan
CFO and Director
(604) 694-0021
(604) 694-0063

No stock exchange has approved or disapproved the information contained herein.


Panama News
Vol. 11, No. 4
Feb. 20 - March 5, 2005

Is this an alleged embezzler’s ploy to cash in on canal expansion?
Just as the Cerro Petaquilla mine promoters say they're set to start, problems arise

by Eric Jackson, partly from other media

There’s gold in them hills. Also, copper, silver molybdenum and other mineral resources. Proof of that is the frequency by which the police have to move in to eject wildcatters, many of them Colombian, who wash away hillsides in the forest with high-pressure hoses to get the gold.

But how much of the metal that drives white men crazy, extractable at what cost? And is Cerro Petaquilla really a world-class copper deposit?

These questions could come front and center in Panamanian political discourse within the year, as soon as the Panama Canal Authority issues its plan to expand the canal. If previous suggestions to flood areas west of the canal are part of the plan, then all of a sudden the Cerro Petaquilla mining concession would become the largest single property for which compensation would have to be paid.

Now if that compensation is for mineral rights that have never been proven, let alone exploited, that would lead to one set of assumptions about the value of the concession. But if the concessionaires can claim that they were busy developing a mine when the government came in and declared eminent domain, that could support a different valuation.

In recent weeks a series of reports have appeared in La Prensa and El Panama America, announcing the imminent start of work at the Cerro Petaquilla mining concession, actually a set of nine concessions encompassing some 250 square kilometers of northern Cocle and western Colon provinces, held by Petaquilla Minerals Ltd. That limited partnership includes Vancouver-based Adrian Resources Ltd (listed as ADL on the Toronto Stock Exchange), among whose directors and shareholders is former Cocle Governor Richard Fifer, and Inmet Mining, another Canadian outfit. Richard Fifer is chairman of the board of Petaquilla Minerals Ltd.

In the face it presents to Panama, Cerro Petaquilla has always been Fifer’s project. He first claimed mineral rights at Cerro Petaquilla in 1987. Through his company GeoInfo, this reporter was taken along with other journalists on a tour of Cocle province back in the mid-90s. In the recent corporate mainstream media reports on the project, the Fifer connection is always prominently mentioned. The press releases by the promoters invariably appear over Fifer’s signature.

There are a several interesting features about the recent Cerro Petaquilla stories.

One is that they state certain figures about the amount of copper, gold, silver and molybdenum in the ground at the Cerro Petaquilla concession, generally without attribution and always without question. The figures cited are invariably the concessionaires’ estimates, but are usually presented as undisputed facts.

Another oddity about many of the recent Cerro Petaquilla stories is that they are not by journalists on the staffs of the publications involved, but by freelancers.

And then there’s the story that Reuters disseminated, which announced that a Canadian company had obtained $1 billion in financing and the word to start mining work. But the company denied that it had obtained a line of credit.

Most importantly, Richard Fifer now stands accused of embezzlement. After more than two weeks as a fugitive sought for embezzlement from the government between 1999 and 2002, when he was the governor of Cocle, a court has rescinded a warrant for his arrest but forbidden him to leave the country and required him to report tro police every 15 days while his criminal case is pending. Earlier, from his hiding place he had his lawyers surrender $68,000 he allegedly pilfered from the funds at the Cocle governor’s disposal, and another $47,000 allegedly diverted from Spain’s contribution toward the Arias Brothers Museum in Penonome to the Office of Patrimonial Responsibility. No admission of wrongdoing was made, but prosecutors aren’t calling off the criminal prosecution.

Panama News
Jan 26-Feb 8. 2002

Fifer replaced as Cocle governor

After complaints from the provincial organization of his own party, arguments with ANAM about permits from projects that would have environmental consequences and a lot of criticism over plans that would establish new pushbuttons in Penonome, Richard Fifer has been removed as governor of Cocle province. The new governor is Irving González and the new lieutenant governor is Ernestina Tejada. Fifer had used his own property to furnish the governor's offices and he took it with him when he left, so not only are provincial employees wondering whether they will have jobs under the new administration, but in many cases they've been having to improvise places to sit and to write.

University takes sides in Penonome pushbutton row

The promoter, Eros Nos, SA, says that it plans to build a "short-term lodging facility," but the Catholic Church and municipal officials in Penonome say that what is really contemplated is a new "pushbutton" place of assignation and they disapprove. The Ministry of Commerce and Industry and the governor of Cocle have issued some of the necessary permits, but the city refuses to sign off and now the Cocle Regional University Center (CRUC), which is located near the site proposed for the project, has joined the opposition. The administration has criticized the project, a student committee has been formed to moblize public opposition and law students at the University of Panama branch are organizing a possible legal battle to stop the development.

Latin Business Chronicle
Panama Economic and political overview.

Martin Torrijos, a U.S.-educated economist assumed Panama's presidency on September 1, 2004, pledging to negotiate a free trade agreement with United States and implement reforms aimed at reducing government expenditure and taxes. Despite Panama's status as a major trading nation, the country only signed its first free trade agreement in 2002 - with El Salvador.

Torrijos has also vowed to reduce and fight corruption, which was widespread under his predecessor, Mireya Moscoso.( who appointed Fifer as Govenor e.p.) Transparency International gave Panama a score of 3.4 (with 10 being best) on its latest survey of corruption perception.

In addition to a canal linking the Atlantic and Pacific Oceans, Panama is home to the world's largest shipping registry, Latin America's largest banking center (in number of banks) and largest free trade zone (Colon Free Zone) and a major offshore company registry.

As a result, Panama is Latin America's most globalized economy, according to the 2004 Globalization Index from A.T. Kearney and Foreign Policy magazine.