News Release

Released: May 27, 1994  Contact: Ron Messent  660-4800

The British Columbia Securities Commission today released a decision in the matter of Harry Claude Faulkner.

Mr. Faulkner was the president and a director of International Shasta Resources Ltd., a reporting issuer listed on the Vancouver Stock Exchange, from 1966 to 1988.

During 1987 and 1988, Shasta made payments totalling about $190,000 to Mr. Faulkner and his private company, Harco Management Ltd., over and above payments due under Harco's management contract and reimbursements for expenses. These payments, which Mr. Faulkner characterized as advances, were not authorized by the directors of Shasta or approved by the Vancouver Stock Exchange. No invoices were submitted to Shasta for the payments and no liability existed for them. Mr. Faulkner has repaid only $10,000 of the advances.

Mr. Faulkner also signed a document by which Shasta guaranteed payment to the Bank of Nova Scotia of all debts and liabilities of Harco. This guarantee was not authorized by the directors of Shasta.

The Commission found Mr. Faulkner responsible for a number of significant contraventions of regulatory standards. In summary, Mr. Faulkner:

- misappropriated $190,000 from Shasta;

- failed to cause Shasta to disclose the unauthorized payments as material changes, as required by section 67 of the Securities Act;

- purchased and sold Shasta shares when he had knowledge of material changes that he knew had not been generally disclosed, in contravention of section 68(1) of the Act;

- failed to notify the Vancouver Stock Exchange and obtain approval for the renewal of Harco's management contract or the payments, thereby causing Shasta to breach its listing agreement with the Exchange;
did not act honestly, and in good faith and in the best interests of Shasta, and therefore breached his duties as a director of Shasta under section 142 of the Company Act; and

- caused Shasta to provide financial assistance to Mr. Faulkner and Harco in violation of section 127 of the Company Act.

On the basis of these findings, the Commission has ordered the removal of Mr. Faulkner's trading rights, and has prohibited him from being a director of any issuer, for fifteen years. The Commission has also ordered Mr. Faulkner to pay costs of the hearing.

The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.

Copies of the Commission's decision (19 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.