Monday, May 5, 2008

Southwestern sells troubled Boka gold project

Southwestern Resources Corp. will be selling it's Boka Gold project to Hong Kong. On Friday after reporting that there could possibly be considerably less gold than was reported the scandal-ridden Boka Project will be transferred to Hong Kong East China Non-Ferrous International Mineral Development Co for $9.4 million. Last July Southwestern withdrew assay results that had previously been reported siting errors in the complies gold data. It was all very reminiscent of the Bre-X gold mining fraud so nototrious in the late 1990s. Although the gold samples did not seem to have been tampered with nonetheless Southwestern stated that the gold sample data had indeed been changed. The sale of Boka to Hong Kong East China Non-Ferrous International Mineral Development Co is a most important step in Southwestern's rebuilding efforts.

Southwestern chief executive Timo Jauristo said in a statement. "As a result of these challenges, pending litigation and its current capital resources, the company did not believe that it could adequately explore and develop both Boka and its Peruvian properties."

Southwestern shares have seen a drastic decrease in value. Worth more than C$20 in early 2004 as excitement over Boka peaked, were trading at 55 Canadian cents as the Toronto Stock Exchange opened on Friday. Under the sale of Southwestern's 90-percent stake in Boka, it will also receive a 2.7 percent net smelter return royalty on gold production in excess of 6.5 tonnes. Southwestern has several projects in Peru, including the Liam gold-silver joint venture with Newmont Mining Corp.

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