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By John Helmer in Moscow

Saddleback Gold recruits General Sir Mike Jackson in an attempt to do battle for the Tajikistan gold sector.

It has been 140 years since last two English adventurers walked into Tajikistan with a sales pitch of commercial goods and guns, and with the barely concealed intention to beat the Russians.

Back then Robert Shaw, a Sandhurst trained soldier, and George Hayward, a member of the Royal Geographical Society, met Yakub Beg, ruler of what was then called Chinese Turkestan.

Yakub saw the Englishmen as an opportunity to enlist London to protect his fledgling kingdom against a Russian takeover, or a return of Chinese overlords. Shaw wanted to make more money than he could selling Indian tea. Hayward was a spy, commissioned to map the Pamir mountain passes through which London suspected that Russian troops might attack the Indian colonies.

When General Sir Mike Jackson landed in Dushanbe, the Tajik capital, this past June 17, his arrival was as celebrated by the local dignitaries as Yakug Beg’s court had greeted Shaw. The official Tajik press reports, monitored by the BBC, said that Jackson would spend four days meeting Tajikistan’s Foreign Minister, Finance Minister, Trade Minister, and Hasan Saduloev, chairman of Orienbank. Keep this name in mind — Saduloev is the brother-in-law of Tajikistan’s President, Emomali Rakhmonov (Rahmon). Since the president was abroad at the time, Saduloev was Jackson’s most important host.

The Tajik media described Jackson as managing director of Saddleback Gold Corporation, and that he and his delegation would “look at several investment projects drawn up by Tajik experts.” Saddleback Gold, the Tajik reports suggested, had been working on gold and silver prospecting in Tajikistan since 2004,along with the “Tajik Qulla limited liability partnership” at the Tabospin goldfield, in the north of Tajikistan.

Some of this is undoubtedly true; although Jackson himself refuses to answer questions about what he was doing in Tajikistan, or about his involvement with Saddleback Gold.

According to Michael Reeve, chairman of parent company Saddleback Corporation Ltd., and Alastair Ralston Saul, Saddleback’s chief executive, Jackson is a director of the parent, not an executive of Saddleback Gold, which is described as the Tajik subsidiary of the UK-registered parent.

Jackson must have been encouraged by what he was told in June, for several weeks later, on August 3 he was appointed director of Saddleback. He had already been serving for almost a year as a director of Silk Route Resources, which had a 9% stake in Saddleback until a new share issue in July.

A company filing confirming Jackson’s appointment to Saddelback was lodged by Maxwell Winward; it also confirms Jackson’s prior relationship with the Ralston Saul group through Silk Resources. Jackson’s appointment notice also gives his address as 17 Hill Street, Mayfair; the same address is given by Clarissa Ralston Saul, appointed secretary to Saddleback in January 2007. Another Saddleback shareholder, Mel Morris, is also recorded as living at the same address.

Alastair Ralston Saul founded Saddleback as a private company, and according to UK registration records, it began in March 2004 with a nameplate in London, and a registered secretary in Dorset. Directors listed include Ralston Saul’s daughter Clarissa, his wife Lavender, his son William, and himself. Its only listed address is that of London lawyers, Maxwell Winward, who have confirmed they represent Saddleback and Ralston Saul. The Ralston Saul family is listed at addresses in London, Somerset, and Dushanbe.

London shareholding data indicate that until this past July, William Ralston Saul was the single largest shareholder of Saddleback, with GBP2.6 million in shares, 54% of the listed capital of GBP4.8 million. Minerva Resources of London came next with GBP2.4 million. The sole Russian investor identified is named Marina Dimitrieva, with a Moscow street address, and shares worth GBP80,000.

On July 12, a new issue of 7.5 million Saddleback shares was largely bought up by Altima Central Asia Master Fund, a unit of Altima Partners registered in the Cayman Islands. Altima appears to have pumped GBP2.8 million into Saddleback’s treasury. Altima is a hedge fund group controlled by Mark Donegan and other partners at a Carlton Gardens address in London. Media reports have claimed the originators started out at Deutsche Bank between 1999 and 2002. Estimates of Altima’s capital value range between $1 and $3 billion.

Jackson is not identified in the shareholder listings for Saddleback.

Contacted by Mineweb, and asked why the retired British general had gone to Tajikistan for Saddleback, Alastair Ralston Saul said he and Jackson had served in the same parachute regiment as young men, but he declined to speak more about his company, its Tajikistan business, or Jackson’s role. Reeve confirmed that Jackson had been to Tajikistan during his service days; and that he speaks Russian.

Sources in Dushanbe and Moscow tell a more informative story about the contest for gold prospecting rights in Tajikistan, some of them of doubtful value according to geologists. The sources claim that as a high-ranking British and NATO general, Jackson is important to President Rahmon’s campaign to oust Russian influence, and make money on new western sponsorships.

Saddleback Gold was preceded in Tajikistan by another Ralston Saul venture that ended in disaster, and a public sacking from Gulf International Minerals Ltd. (GIM). Initially listed on the Vancouver Stock Exchange, GIM was taken over in the mid-1990s by Ralston Saul, backed by Patrick and Oliver Vaughan, two Englishmen who made a fortune in real estate and discotheques. As chief executive of GIM, Ralston Saul moved the stock listing to Toronto, and raised several million dollars in public funds.

The Tajikistan gold projects, on which investors put their money, included the Aprelevka project. But on June 30, 2004, GIM’s board issued a lengthy public notice in which it disclaimed presentations Ralston Saul had made to raise cash from the market, claiming substantial gold reserves at Aprelevka, Aktash, and other sites.

According to the board statement, Ralston Saul’s presentation “was used in broker and investor meetings in connection with the December 2003 private placement and the Company’s website also provided a link to it.” In fact, the board told the market, there had been unsubstantiated statements “that could be misleading. The brochure contains many other misleading or unsubstantiated statements and the entire document should be regarded as unreliable.” Millions of ounces of gold allegedly buried in Tajik deposits, to which GIM claimed the rights, disappeared in the clarifications.

A forensic investigation into Ralston Saul’s financial management was also opened, the company said, along with an investigation by the Royal Canadian Mounted Police. Ralston Saul was found to have used company funds to hire and accommodate kin and other loved ones. According to the GIM statement, and reported in Canadian media at the time, “Deloitte Touche Forensic & Investigative Services Inc. (“Deloittes”) has been retained to conduct a forensic audit focusing on allegations made with respect to the payment of bribes, the participation in kickback schemes and the misappropriation of the Company’s funds.”

No charges resulted. However, the Ralston Saul family was ousted. Again according to GIM, “Alastair Ralston-Saul, Clarissa Ralston-Saul and William Ralston-Saul have been terminated as employees of the Company without severance and Alastair Ralston-Saul has resigned as a director of the Company.”

The action in Toronto and London also led to the formulation of the opinion in Dushanbe on the part of the Tajik government ministries, with which Gulf had worked, that discouraged further business with Ralston Saul. Sources in Dushanbe say this did not discourage Ralston Saul, who introduced Saddleback as Gulf’s successor, and new rival. Ralston Saul then opened the bidding for Tajik gold deposits sought by his former company, and by another rival, UK-listed Kryso Resources.

Kryso was established by three men — Vassilios Carrelas, a South African geologist; Craig Brown, who had worked for GIM as chief financial officer, fell out with Ralston Saul, and resigned in 2003; and an influential Tajik businessman, Abualai Ismatov. Brown and Carrelas are mining professionals; Ismatov made his first fortune trading cotton futures.

Listed on the London AIM (KYS), with a current market capitalization of almost GBP7 million, Kryso holds development and mining rights to the Pakrut deposit in Tajikistan. Preliminary testing by Snowden indicates 596,500 oz of gold on a JORC-compliant resource count. A July brokers’ report by FD Capital advised the market that new drilling at Pakrut suggested that “the deposit may now sustain a higher mining rate and longer mine life than was initially envisaged.” The Kryso share price rose on the news; it remains 30% below its level in 2005.

Soviet-era geology, supplemented by work by Gulf, Kryso, and other companies has pinpointed where Tajikistan’s gold assets ought to lie. However, Tabospin, the new Ralston Saul venture after the Gulf debacle, is not viewed positively in Dushanbe. According to a geologist there, projections of more than a million ounces are unrealistic, and that drilling to date by Saddleback has been unpromising.

Gulf has also run into fresh difficulties with Aprelevka. In 2004 the company reported that in the four months, February through May, it produced 146,546 oz of gold (monthly average of 36,637 oz). Silver production in the same period totaled 563,345 oz. This year, according to Dushanbe contacts, the monthly production at the pit has dropped to an average of about 1,300 oz; annual output this year will be about 16,000 oz. The threat of a new value-added tax provision could eliminate the marginal profitability of the operation.

Accordingly, Gulf has been bidding for fresh prospecting and mine development rights. Sources in Dushanbe have told Mineweb that Gulf was told it could improve its bargaining position there, both in relation to the tax problem and to the contest for new licences, if it banked through Orienbank controlled by Saduloev. It has also been offered a tie with Abdukokhir Nazirov, appointed governor of Sugd region at the end of February.

Orienbank and Saduloev appear in UK High Court records, listed as defendants in a claim brought by Avaz Nazarov, a group of his companies, and former executives of the Tajikistan Aluminium Plant (TadAZ, Talco), Tajikistan’s biggest business. As Mineweb has reported, that affair involved charges of corruption in a hostile takeover by Russian Aluminium (Rusal), abetted by President Rahmon and his family, of the principal enterprise of the country, and capturing its cashflow.

Saduloev is identified in the High Court documents, filed in 2005, as the brother of President Rahmon’s wife. He and his bank are also charged, according to the court documents, with being part of a conspiracy to deprive the Nazarov corporate group of its aluminium production and trading rights. Saduloev had arranged, the documents claim, close cooperation between Orienbank and Rusal in the alleged conspiracy.

Also, Saduloev was personally charged in the High Court with telephoning Nazarov personally, and conveying Rahmon’s invitation to attend the birthday party of the President’s son, and have a meeting at the same time aimed at discussing the issue of TadAZ’s debt. According to the court claim, that was a trap to lure Nazarov to Dushanbe, where he believes he would have been arrested.

Since the opening of Mineweb’s investigation, Reeve has changed his recollection of Saduloev’s relationship with Saddleback. In a telephone interview Reeve told Mineweb: “As far as I am aware we haven’t done any business with Hasan. There are discussions with him. Nothing has been finally agreed.” In an email following this remark, Reeve wrote: “General Jackson has never met Hasan Saduloev, and neither he or Saddleback Gold Corporation have had any discussions about Banysariob.”

Banysariob is one of the gold deposits which government officials in Dushanbe are considering licensing to one of the rival international mining companies. Another is Chashma-Dinar. Soviet-era estimates, available in Moscow, suggest the former, an alluvial gold deposit, has about 300,000 oz of mineable gold. The latter is estimated at about 1 million oz. The licence for Bandysariob was awarded to a company controlled by Saduloev last year, a Dushanbe source told Mineweb. A member of Saddleback Gold, working in Tajikistan, is on record as saying that his company is taking over the project.

Saduloev and President Rahmon are the key to Saddleback’s emergence in Dushanbe, following reports in the government that followed Ralston Saul’s removal from Gulf. Government ministers are reported to support new licence awards to Gulf, Kryso, and Russian gold miners also active in the country.

Mining sources in Dushanbe and Moscow sources claim to know of the existence of a Tajikistan KGB report critical of Ralston Saul’s role before June 2004, and negative in its recommendation for government dealing with Saddleback. But President Rahmon, who retains substantial personal oversight powers in the gold sector, is reported to have overruled the recommendation.

The new money supplied to Saddleback by Altima followed by 21 days Jackson’s departure from Dushanbe, and reflects the hedge fund’s confidence that appears to have been generated by Jackson’s visit. Geologists in Dushanbe believe there is not enough gold in Tabospin to justify the level of confidence Jackson left behind, in investment promises to the Tajiks; or took back with him to London, in asset promises to investors.

The value of those promises is now being hotly contested within the Tajik government, and between the business factions aligned with them. A powerful European Union delegation, heading soon to Dushanbe and led by Xavier Solana, is likely to test what influence the British general may have been exercising to win government backing for Saddleback, and for Altima’s multi-million pound wager.

As the famously gruesome end of George Hayward (decapitation), the 19th century London adventurer, suggested, not long after his encounter with Yakub Beg, the size of the money pot increases the likelihood of treachery, while arms and soldiers never insure against it.

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