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By John Helmer in Moscow

Claims for the 5th largest gold reserve in the world.

Sturm und drang was the title of a German play, ostensibly about the American revolution, which captivated German audiences in 1776. The play and its author have been forgotten; but the title has lived on as the name for a European movement expressing extremes of emotion in literature. In the typical sturm und drang novel or poem, then and now, the protagonist is driven to action, not by pursuit of noble means or genuine motives, but by greed or revenge.

According to a Nevada-incorporated junior miner called Golden Share, it holds the rights to mine a gold deposit in the Russian fareast, called Shturmovskoye. The Russian name derives from the German word; it also means storm, assault, attack. There’s nothing fictional about the deposit, located in the Magadan region. It’s not newly discovered either, nor virgin territory. It was first identified almost seventy years ago, and in the years that followed prospecting between 1935 and 1942, diggings at the site produced 194 kilograms of gold (6,237 oz).

Nikolai Goryachev, a Magadan consulting geologist, who has photographs of the site from 2006, isn’t waxing poetical about Shturmovskoye either. That’s because he thinks the drang outweighs the sturm – the deposit is too small and too low-grade to be of interest to anyone. He doesn’t read pinksheets, or investorhub.com.

Claims about Shturmovskoye appear in a money raising prospectus which Golden Share Capital Corporation issued in Moscow last October. Golden Share says it is incorporated in Nevada, but majority owned by Russians. The Russian principals of Golden Share, listed in the prospectus, include Fyodor Dovgan; Valentin Chegenev; Valery Kovalenko; plus Paul Ditter, an American; and his Russian wife, Anastasia Tseragorosteva-Ditter.

Dovgan is the owner of several Magadan gold prospecting or alluvial mining companies, with licences and operations in Magadan. He and Chegenev have also been identified as the chief executive and substantial stakeholder of the Aurus Corporation. Kovalenko is a mid-echelon official in a Russian government inspection agency. Ditter lists his business as “Strategic Development & Corporate Governance”.

So far, Aurus claims to hold a $4 billion gold reserve in a pyrite dump near Moscow, but Mineweb reporting to date indicates there is no Russian verification for this claim. The valuation and asset claim is buried in a financial report of Zabaikalgeoprom, a Russian company owned by Dovgan, associated with Aurus, and reporting on its website. Aurus is incorporated in the US in the state of Delaware, giving as its line of business “sporting and athletic goods”:


But since it is traded on the OTC pinksheets market, the Aurus claims are unregulated by the US Securities and Exchange Commission (SEC). Aurus maintains Canadian representation too, with a Montreal agent and also a public relations spokesman, Christine Lagace of Lagace & Legault in Montreal. But appearances are misleading. Toronto Stock Exchange sources say they are concerned for Canadian investors following claims by executives based in Montreal, but they note that the companies themselves may be outside Canadian regulatory jurisdiction.

A clarification of Aurus’s asset claims and Russian counter-claims was promised by the company for January 29, but this has yet to appear; Lagace has declined to respond to questions.

The Aurus men appear to have moved on from their tailings dump near Moscow to the Golden Share venture with Shturmovskoye. And after failing to place shares and raise $50 million in capital in Moscow late last year, the Golden Share promoters may also be negotiating with another Montreal stock promoter, Daniel Ryan. He has told Mineweb that his company, ABV Gold holds a “letter of intent [which] calls for a working interest in the Russian Mine starting in the 2nd quarter of 2008.” Ryan has claimed that the value of this mine’s reserves is between $3 billion and $4 billion. He has also been insistent, in a recent email: “I DO NOT KNOW THE PEOPLE AT AURUS”.

Ryan is Canadian, ABV Gold is not. It is registered in the US state of Nevada; it claims SEC reporting status and characterized its business as “refuse systems”:


Again, like Aurus, ABV Gold files no compliance reports to the SEC and is unregulated in either Canada or the US.

Details of the Golden Share claim about Shturmovskoye appear here:


The Golden Share claim is that it holds the deposit licence, and that the officially approved C1 and C2 category inferred resources total 5.15 million tonnes of ore, with a gold grade of 21.5 grams/tonne; and 224.8 tonnes (7.2 million ounces) of gold. The numbers are so large, they produce the claim that Shturmovskoye “ranks ‘fifth’ in the world of largest gold mine deposit sites.” According to Golden Share’s prospectus, Shturmovskoye is licensed to Dovgan until the end of 2023.

A reference in the Golden Share prospectus to the Kitco archive for the world ranking of Shturmovskoye was checked, but revealed no corroboration.

A source at one of the Magadan region’s leading gold and silver mining companies told Mineweb that his company has looked at Shturmovskoye, and dismissed its reserve size, its grade, and its commercial value. “The deposit had some extraction in the 1940s, but it is not very big – [Russian resource category estimates] C1 and C2 are around 10 tonnes [321,500 oz], with a grade of 7-8 grams per tonne. We were not interested in the deposit, as the volume of gold is too small.” He also said that Shturmovskoye is licensed to Russian company, OOO Nedra.

There are 374 companies with the name Nedra (“mineral resource”) on Russia’s corporate registration files. No trace of this licensee has been found.

According to Nikolai Goryachev, the director of the regional geological institute in Magadan, a team of his geologists “prepared a valuation of Shturmovskoye to be issued for further exploration by Magadan Rosnedra in second half of 2006. I don’t remember if the license was granted, but I do remember that the deposit was a difficult one, with low gold grade, and various accompanying rock types, which are hard to process. It was not interesting to any private investors.”

Magadan Rosnedra is the regional branch of the federal agency in charge of licensing underground resource deposits. Sources at the Moscow headquarters said they remember nothing about the Shturmovskoye deposit, and have agreed to investigate.

A bulletin from the Russian wire service Interfax reported from Magadan on October 19, 2006, that “the rights to the Shturmovskoye gold deposit in Russia’s Magadan region have been auctioned to a local company, OOO Nedra, for 59.55 million rubles [$2.3 million], or 20 times the starting price of 3 million rubles, the region’s natural resources agency told Interfax on October 16. Three other companies – Moscow-based OOO InvestHolding and OOO Prioritet, and the local firm OAO Rudnik im. Matrosova – bid for the license.”

According to this source, “the Shturmovskoye property is 585 kilometers northwest of the city of Magadan. It contains a proven 9.5 tonnes of C1 gold and probable 20 tonnes to 300 meters.”

Oleg Mitvol, the chief federal investigator for mine licensing fraud, said he has opened an investigation into the Shturmovskoye licence, and into claims about its reserve value. He told Mineweb: “The investigation shows what I have been trying to warn North American regulators about for a year now: there are companies trying to attract investors, and boost share price and market capitalization, by making unverified and inaccurate claims about gold and silver reserves in Russia. I realize that some of these fraudsters are exploiting gaps and loopholes, especially between Canada and the US; and that US regulators are reluctant to pursue the penny stock frauds. But the damage is being done to the Russian market, and to the possibility of genuine capital collaboration in Russian mining.”

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