How the CanAf Group (CAF) contract unfolded

In 2006, I answered an e-mail answer to my prayer (expressed oft-times on www.MiningInvestments.com) that a Canadian “junior” mining company listed on the “re-formed” TSX, to replace the tainted Vancouver Stock Exchange, with a, “Yes, we control the Bowser Creeks property, but are not looking for yet another pump and dump on the Win Claims, where you win, I loose!”

In preliminary negotiations by e-mail I was promised that the buy in by performing the drilling option to acquire 75% of my property — that already had had $3 million spent on it’s development— had, besides an good faith $25,000, an option to buy upon signing, 500,000 shares for 10¢ ($50,000), putting me on the insiders circle for once. I drove north to Vancouver, British Columbia, to sign an agreement, which had morphed into, thanks to a lawyers legal interpretation of “... a stricktly (SIC) correct technical detail that the securities and exchange people demand..” of circumventing TSX rules by my being “hired” as a “Business Development” consultant. 

It should be noted that in said agreement that Uganda Mining and Milling, or was it Canadian African Metals and Mining, or was it the CanAfrican Group?, that I was an absolute failure as their Business Development consultant, other than getting Mac&Murray Multimedia to write, design, photograph, program, host, and search engine SEO a state-of-the-art corporate website for CAF, supposedly approved by the TSX, that took the stock from .06¢ when the Win claims were added to a property page that for months had only been showcasing a small Canadian gold prospect, to a solid .30¢ per share, in March, 2008.    

The stock option agreement of 27 November, 2006, was delivered in March, 2008, where I was surprised to see that the stock I supposedly was to be rewarded upon signing, was instead to be stretched out in time over three grants. Nevertheless, Bobby, in the spirit of “partnership” continued with advertising style “hot links” from whatever of her www.MiningMagazines.com that made sense. She also, being one of the best search engine optimizers in the business, was able to get the CAF corporate home site up out of “the sandlot” to the logs showing 800 unique computer cookie signatures —counted only on the first hit— per month.

As the stock kept raising funds past what was needed to make the drill program work, Bobby also used this site to validate CAF with the WesternMiner Best Junior Exploration Company of The Year Award.

When the TSX database showed CAF bumping .40¢, we decided it was safe enough to cash in 1/3 of the shares that had been cleared for trade. The problem then became, as we did not have certificates in hand, was how? This legitimate question to CAF resulted in my being fired, and therefore the right to optioned stock was terminated! So was the “President” I had trusted enough to sign what I considered a follow-up of a handshake agreement.

Part two of an action filed with a British Columbia, Canada, arbitration board addresses the following:

The CAF prepared agreement with WIN had a couple of clauses to comply with the State of Alaska regulations of state claims (11 AAC 96.025 2). These are: 

5.1 Appointment of Operator
Upon signing the agreement CAF shall be the operator of the project which role shall be providing or acquiring all materials, supplies, machine equipment and services required for the project.
….
(b) Preparing and filing all reports or notices required to be filed in the execution of the Claims, in a timely manner. Receipts of State of Alaska annual claim requirements shall be sent to WIN not less than 30 days before a consequential cutoff date.

And: CAF shall keep …  and maintain the Claims in good standing by the doing and filing of all necessary work and the payment of all taxes and rents required to be paid and by the doing of all other acts and things and the making of all other payments required to be made which may be necessary in that regards.

Then came a press release just weeks before the consequential cutoff of September 1 of actually doing and filing proof of labor equal to $16,700 worth of work for the benefit and improvement of the claims. Failure to perform in a timely manner would have meant that the claims could have been open to re-staking by others as of Noon, September 1, 2007.

Canaf Group Inc. Announces Termination of Earn In Option
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 28, 2007)
- Canaf Group Inc. (TSX VENTURE:CAF) announced today that it has dropped its option agreement on the Win Claims Group in Bowser Alaska (see press release dated November 29, 2006).

"This is an exciting time for Canaf," stated David Way, president and CEO. "With the restructuring of our company, we are now ready to focus on our diverse and valuable properties in Africa. The Alaska claims do not fit into our new mandate, and so we have decided not to pursue this option."

As the contract had no escape clause for the president, who had ousted the mining engineer I had signed with, to wave his arms about in such a exciting termination, I waited until “30 days before a consequential cutoff date,” to declare the agreement in default. Fortunately I had been doing my part as a “partner” in securing the services of an American geologist that was able to helicopter in to examine, sample, and map following up the U.S.G.S. suggestions. CAF had rejected his competence as “lightweight,” so out of anger to prove the company wrong, Daniel Cutchall carried on past September 1 in good shape, into the snow storms of the following assessment year.

Part of my handshake agreement before signing had a suggestion that lawyers who did not have the experience to understand that the mining had acquired a bad reputation through faulty interpretations of mining law, be involved. Thus, to my surprise I received this bit of free legal advice to trump my 50-years of experience:

Mr. Barry Murray
Dear Sir:
Re: Canaf Group Inc., formerly Canafrican Metals and Mining Corp.
We act for Canaf Group Inc. (the "Company") and have been asked to respond to your somewhat confusing email of June 15, 2007 at 9:46 p.m. The Agreement signed by you in respect to the Win claims is an option to earn an interest. This type of agreement is well known and generally well understood in the industry. It is the Company that has the option as to whether to continue to expend money on the property in order to earn an interest. The Company has decided not to do that. It has left the claims in good standing for a year, again an industry standard practice. The terms of your Option Agreement are consistent with the policies of the TSX Venture Exchange and there is nothing in it that is unusual or contrary to normal practice. While I must admit I had some trouble following your email, I would suggest, with respect, that perhaps some independent professional advice would assist you in understanding what you have signed and what is expected from each party in agreements such as these.
Yours truly,
MACLEOD DIXON LLP
D. Richard Skeith

Another of the clauses of the agreement mentioned that: “ pursuant to the Arbitration Act of the laws of British Columbia, Canada, and such dispute shall be referred by the parties affected thereby to an Arbitrator who shall be agreed upon by the parties as provided in the Arbitration and Conciliation Act.” You thought I was wordy? CAF also signed that the, Decision of Arbitration Binding: The decision of the Arbitrator shall be rendered in writing with all reasonable speed and shall be final and binding upon the parties.

So here I am I am in March 2008, at age 69, waiting for a $50,000 decision from a British Columbia arbitration board concerning CAF ordering a professional web site from Bobby that was delivered before — online and raising funding— the details of the TSX rules were delivered. I also am seeking payment of $16,700 I spent covering CAF’s default of an assessment work obligation.  What really makes all of this laughable is that I filed my arbitration complaint, paid the fee for both parties, filed pages of pleadings and documentation, in September 2007. All I have in return was a phone message last December that they could not locate the lawyer for CAF to get a response. Silly me. My experience in American small claims courts is if the party of any part did not respond, that settled the matter by default.

P.S. 

Since signing there has been an overall “high-grade” increase in surface values of ZN, PB, CU, AG of $12 million, making the property mine able.  CAF had an option to mine by paying a standard 10% royalty, which could have paid to explore using the James Orr adit proposal, which had been approved so long ago by the U.S. Office of Mineral Exploration!  The real eyebrow lifter when one looks at “intent” is that the raise in spot silver alone would have returned the drilling investment to acquire a 75% interest of the property, twice over, without even calculating at depth values.

I have been getting queries from the unpaid exposure Mac&Murray did, as to exactly what happened. Especially, as no one from CAF even set foot on the claims during the assessment year they were the legal operator. As a former CAF “business consultant” person I tried to answer set the record straight, so CAF could dive right on into a valuable diamond prospect in the middle of an “exciting” war in the Congo. No wonder the stock has been at .13¢ for weeks.

I sent a simple press release to the TSX mentioning in a full disclosure style that CAF had been taken to arbitration. It was ignored, as Bobby does with all the spam mail press releases out of Vancouver, Canada stock companies who just expect free advertising.  So, I recently bought www.mining-press-releases.com, to make the full-disclosure system just a bit fairer to our Information Age readers.