“A gold mine is a hole in the ground with a liar standing on top of it.”
Mark Twain

It seems that Canadian gold mining company, Bandera Gold Ltd.  (CVE:BGL), has been caught up in an elaborate scam. In 2005 Bandera paid $6.5 million to Mexican mining firm Minera San Jorge for a 60% stake in the two Cinco Minas mines located outside Guadalajara, but never received the paperwork proving their stake.

Southridge Minerals, subsidiary of a parent company with a dubious past, Southridge Enterprises, had also claimed ownership of the mines, displaying their concession certificate on their website. However Southridge’s involvement with the mine has come under great suspicion after an independent report by International Safety and Security Firm exposed with video and photographic evidence that “the Cinco Minas mine, equipment, and mill has been completely non-operational for some time (presumably many years)”. This runs contrary to Southridge’s website which shows video of a mine busy with activity.

The former Chief Executive of Southridge Enterprises, Alex Smid, has been touted by pinkinvesting.com as a “seasoned criminal involved with the Mexican and Russian Mafia whose unscrupulous practices date back to 1980, his criminal feats include extortion, blackmail, loan sharking, counterfeiting, prime bank fraud, and identity fraud”. Smids current location is unknown.

In light of the conflicting evidence put forward by the Security Firm and Southridge’s claims of an active mine, it is suspected that Southridge could be creating a pump and dump scheme. Such a scheme requires an aggressive PR campaign to “pump” the stock up to inflated levels, at which point investors who are “in the know”, “dump” the stock at the inflated price the stock consequently crashes. Along with temporarily suspending trading of Southbridge securities, the SEC has also cautioned that “ investors . . . should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company (Southbridge)”.

The situation was heightened on Saturday when it was claimed that the Michael Davis and Derald Johnston, the respective CEO and treasurer of Southridge minerals were found dead in the Rio Santa Rosa River. However, upon investigation the authorities were unable to confirm the deaths, nor were they in possession of the suspected corpses. This leads many to believe that the story of their death was planted in the local press, and false identities invented to cover up an elaborate con.

Southridge released a dubious press release on Monday, stating that it had sold its concession in the Cinco Minas to the previously mentioned mining company Minera San Jorge. However, the contact information for Minera San Jorge do not appear to be functional, and CEO Jaime Arturo Anaya has not replied to the Guadalajara Reporter via e-mal.

Original Article: Guadalajara Reporter