Augusta Resource Corporation Chairman Richard Warke and board member Donald B. Clark have been business partners for more than two decades.

Warke, a venture stock promoter, and Clark, a banker, have served on the board of directors of several Vancouver, B.C.-based public companies.

From their offices in the Terminal City Tower overlooking downtown Vancouver’s waterfront, Warke and Clark now manage several speculative mining companies including Augusta Resource Corporation, Wildcat Silver Corporation and Riva Gold Corporation.

Augusta owns the Rosemont Copper Company, which is seeking permits to build an open pit copper mine in the Santa Rita Mountains south of Tucson. Wildcat Silver is seeking government permits to construct a silver mine near Patagonia, Ariz. Riva Gold has mining claims in Guyana.

Their business partnership began in 1991, when both men served on the board of First Western Metals. First Western ran into financial difficulties and was issued cease trade orders by Canadian securities regulators in 1991 and 1992. First Western later changed its name to Augusta Metals Corp. before acquiring Cybercom, Inc.

Warke and Clark were on the Cybercom board when Canadian regulators issued the education software company a cease trade order in 2002 for failing to file annual financial statements. The CTO was never lifted.

Warke and Clark also served on the board of directors of West Coast Plywood Company and were corporate officers when the company filed for bankruptcy in July 1995.

Wark and Clark, along with four other current and former board members of Augusta Resource, served on the board of Sargold Resource Corporation. Sargold operated an open-pit gold mine in Sardinia. See related story and documentary.

Clark also has an extensive background on the board of directors of several U.S. corporations, most notably, Pasadena, Calif.-based Conversion Industries, Inc.

Clark resigned from the Conversion board of directors in October 1994, 12 days after the American Stock Exchange announced its intention to delist Conversion for alleged trading irregularities.

Conversion reached a settlement agreement with the U.S. Securities and Exchange Commission in March 1995 and agreed to be delisted from the AMEX. Conversion filed bankruptcy in May 1995.

Warke’s business history includes a 1989 insider trading settlement agreement with a British Columbia Securities Commission and a personal bankruptcy proposal filed in September 1998 and satisfied in November 2002.

Warke is listed on the British Columbia Securities Commission website under the commission’s “Disciplined Persons and Investment Caution” section.

The corporate and personal bankruptcies, stock exchange delistings and cease trade orders described above were not disclosed in some subsequent filings by public companies that included Warke and Clark as directors. Among these companies is Augusta Resource.

Warke’s personal bankruptcy was frequently omitted from corporate disclosures that require personal bankruptcies to be reported for 10 years. Augusta Resource, for example, did not disclose Warke’s bankruptcy filing even as the case was ongoing between Sept. 15, 1998 and Nov. 22, 2002.

Augusta Resource did not disclose Warke’s bankruptcy until April 6, 2006, regulatory filings indicate. Augusta Resource continued to disclose Warke’s bankruptcy in 2007 and 2008.

The company, as well as other public companies that include Warke and Clark on the board of directors, have not disclosed the bankruptcy since October 2008, except on one occasion.

Ventana Gold Corporation disclosed the bankruptcy on Oct. 31, 2008, which is more than 10 years after Warke filed the petition on Sept. 15, 1998.

The company stated: “The Trustee acting in the Proposal certified the Proposal as fully performed on November 21, 2002 and he was thereby discharged.”

British Columbia Securities Commission Deputy Director of Finance Andrew Richardson stated in a Dec. 15, 2010 telephone interview that personal bankruptcy proceedings must be reported on corporate disclosures for 10 years from the date of filing the initial case and continuing through the date the bankruptcy is concluded. If a case takes four years to conclude, the effective disclosure period is 14 years, he said.

In early September, BCSC spokesman Richard Gilhooley stated in an email that the 10-year disclosure period is not tied to the conclusion date of a bankruptcy. Gilhooley said there are certain events, however, that can trigger the initiation of the 10-year disclosure period beyond the initial filing date of the bankruptcy.

Gilhooley said the Commission does not have a “definitive answer” of whether Warke’s October 2002 bankruptcy default is a triggering event that requires disclosure of the bankruptcy for 10 years from the default date.

InvestigativeMEDIA has included all known examples of companies failing to disclose Warke’s bankruptcy from 2000 through 2012 in a written and video timeline of the business history of Augusta Resource’s longtime business partners. [Read more…]