Heard:	August 4, 1987 and January 13, 1988
		Judgment:  March 4, 1988

   David Anfield, for Marco Resources Ltd., Philco Resources Ltd., Peppa Resources Ltd.

   Joyce Maykut, for the Superintendent of Brokers.

   REASONS FOR DECISION:-- This hearing involves three British Columbia companies and three individuals involved in their management. The companies are Marco Resources Ltd. ("Marco"), Philco Resources Ltd. ("Philco") and Peppa Resources Ltd. ("Peppa"). The individuals are Philip Lieberman, the promoter of all three companies and a director of Philco and Peppa, Lewis Williams, the President of Marco and a director of all three companies, and Arthur Ashton, a director of Philco and Peppa and the engineer who endorsed certain reports relating to mineral properties in which the companies have an interest. Between the two dates of this hearing, Mr. Ashton entered into the agreement and undertaking attached to these reasons, and accordingly, nothing further need be said about his involvement.

   Trading in the shares of all three of the companies was halted by the Vancouver Stock Exchange on May 22, 1987 pending clarification of certain news releases and communications to shareholders. This was followed by a suspension of trading on June 4, 1987. On July 13, 1987, this office issued a temporary cease trade order affecting the shares of all three companies. On October 26, 1987, this office notified Messrs. Lieberman, Williams and Ashton that the hearing on the subject of the cease trade order would be expanded to include a determination as to whether any of their trading exemptions under the Securities Act should be suspended as a result of their participation in the events giving rise to the cease trade order.

   The hearing identified two key issues which must be addressed:

1.		Were the various news releases and  shareholder communications issued by the companies in April and May of 1987 accurate and supported by reliable engineering reports; and
2.		Were Mr. Lieberman and Mr. Williams acting lawfully, responsibly and in the best interests of the companies in connection with the events surrounding the public announcements.
1.		Were the various news releases and shareholder communications issued bv the companies in April and May of 1987 accurate and supported by reliable engineering reports?

   In 1981 Mr. Lieberman decided to transfer interests in the property, which was owned by his private company, American Gold Reserve Inc. ("AGR"), to the three companies, all of which were controlled directly or indirectly by Mr. Lieberman. Marco received a 50% interest in the property, and Peppa and Philco each received 4.5% of the shares of AGR, together with a royalty interest in any production from the property. All these transactions took place for nominal consideration. In July of 1985, one half of Marco's 50% interest was transferred back to AGR for nominal consideration and AGR's commitment to finance exploration and development of the property until the commencement of production.

   Marco, Philco and Peppa commenced trading on the Vancouver Curb Exchange in the late 1960's and early 1970's, and are currently listed for trading on the Vancouver Stock Exchange. The majority of the directors of all three companies consisted at all material times of a group composed of Mr. Lieberman's son (Marc Lieberman), daughter (Peppa Martin) and Mr. Williams. As previously indicated, both Philip Lieberman and Mr. Ashton were also directors of Philco and Peppa.

   In April of 1981, Mr. Stage submitted his first formal report to Marco which proposed a modest program  of exploration of the property, including water well drilling, sampling, backhoe trenching and claim staking, all estimated to cost approximately $50,000.  Approximately 3,900 acres were ultimately staked.

   The next report by Mr. Stage one year later contained assay certificates from PM Labs in Lancaster, California, a firm which had apparently been recommended to Mr. Lieberman by several sources, including an individual who was then employed by the California Bureau of Land Management.  The certificate reported results for six of nine holes drilled on the property. The assays indicated average gold values of 0.12 ounces per ton and silver values of 1.81 ounces per ton. Mr. Stage's report extrapolated these results and calculated that a forty acre, 200 feet deep unit of land would contain over three million ounces of gold and 48 million ounces of silver for a combined total value of almost 3.2 billion dollars. Such a placer deposit would rank among the world's largest and richest.

   In June of 1983, over a year after Mr. Stage's second report, Philip Lieberman issued the first news release on behalf of all three companies reporting on and attaching the assay results and indicating plans to commence extracting and processing 5,000 tons of ore per day.  The VSE reacted to this news release by halting trading of all three companies pending clarification of the news. The VSE retained a placer mining consultant to review the Stage report, and his report showed that Stage's calculations indicated a forty acre block which would contain the equivalent of 7% of all gold mined in California since 1848. The VSE thereupon demanded that the companies present an engineering report by an independent consultant acceptable to the VSE before trading would be reinstated.

   In September of 1983, Ronald B. Stokes and Michael Wetherly presented a report which did not confirm the earlier results by Mr. Stage and PM Labs. In fact, gold values were ten times higher in the PM Labs assays, and silver values were 65 times higher.  The Stokes-Wetherley report indicated "highly significant" discrepancies which it indicated could be attributable to "analytical procedures". The report showed only small amounts of gold and silver mineralization, but did indicate a large volume of alluvial material and the presence of caliche, a cement-like clay near the surface of the deposit. The report stated there was an "urgent requirement" for "determination and evaluation of appropriate analytical procedures".

   Based on that report, the VSE compelled the companies to issue another news release which summarized the report's findings as well as those of a report prepared by an American company, Anselco Exploration Inc., which also showed only trace mineralization. (It is noteworthy that in the news release, the companies rejected Anselco's findings because all drilling, sampling and  assaying procedures were conducted independently by Anselco "and the companies did not have any control over these procedures ..."). The companies indicated that as a result of the Stokes-Wetherley report, they had appointed their director, Mr. Ashton, to supervise all further property development, and had shelved proposals for further drilling pending receipt of an engineering proposal from Bechtel Canada Ltd., a major international engineer firm which had expressed interest in the property. These disclosures having been made, the VSE permitted trading to resume in October of 1983.

   The much-awaited Bechtel report arrived in June of 1984. It was even more discouraging than the Stokes-Wetherley report. Fire assays of 94 samples from 5 holes representing 795 feet of drilling failed to disclose gold, and only two of the assays reported a silver content, both in minor amounts. The highly detailed report concluded that the 1984 drilling did not confirm the presence of gold or silver in potential economic concentrations and recommended against additional exploration and sampling on the claims.

   Upon receipt of the report, Philip Lieberman wrote to Bechtel refusing to pay for work done and rejecting Bechtel's results. Mr. Lieberman took issue with Bechtel's decision not to use PM Labs (which he found to be "totally acceptable"), and to have all the samples assayed themselves rather than provide half of them to Marco so assay results could be "compared", as Mr. Lieberman thought they had agreed. Mr. Lieberman was incensed that Marco's monies should have been used to produce a negative report which suggested tampering with previous samples and which in Mr. Lieberman's view was designed to persuade the directors and officers of Marco that they were "total fools" in having previously spent money convincing themselves of precious metal values which did not exist. Mr. Lieberman pointed out that Bechtel was engaged to "develop and not discredit" the property.

   In his testimony at the hearing, Mr. Lieberman alleged that Bechtel's work had confirmed the massive gold reserves, but that Bechtel had then, in collusion with the Bechtel office in San Francisco, orchestrated misleading assays and produced a negative report to discourage Mr. Lieberman, thereby enabling Bechtel to acquire the property cheaply and develop it themselves. This is a very serious allegation to which I can give no credence whatsoever given the total absence of any supporting evidence.

   For the next two and one half years, things were quiet. Then, on January 10, 1987, Mr. Stage released another report on the property. This report stated that from June of 1983 to October of 1985, Marco was involved in the development of a process for extracting gold from the alluvial deposit on the property and that from March 24 to April 10, 1986, 30 trenches were excavated. During this time Mr. Stage and PM Labs had apparently designed a suitable flux and assay technique which was tested on a 1,050 pound sample located just south of the company's water well. In his report, Mr. Stage compiled a reserve, classified as inferred, within a 240 acre block 400 feet deep on which he reported assays of 0.105 ounces gold per ton and 0.722 ounces silver per ton, both very significant values. Assay work was again done by PM Labs. As Mr. Stage was not recognized by this office and the VSE as being qualified to issue technical reports on the property, an endorsement by a member of the Association of Professional Engineers was required. Mr. Ashton provided an unqualified endorsement.

   Disclosure of the contents of the latest Stage report was not made until April 10, 1987 when a letter was sent to shareholders as an enclosure with annual general meeting material. During that three month interval of non-disclosure, the share prices of all three companies remained stable, in Marco's case at an average price lower than the previous quarter.

   The April 10, 1987 letter to shareholders, which was drafted by Philip Lieberman and Mr. Williams and signed by Mr. Williams, stated that all Marco's tests to date had "consistently" shown results in which gold values "hovered" at .241 ounces per ton and silver values of 2.278 ounces per ton up to a maximum of 750 feet. It stated that "the indicated ore reserves total 201,000,000 tons, calculated for the area of 200 acres which has been marked for the start of production." The letter stated permits had been issued for mining production of 5000 tons per day, with an indicated production per year of over half a million ounces of gold and over 4.7 million ounces of silver. The report concluded:

"Marco Resources has the potential to become one of the major producers in the precious metals area. Based on projected revenues, and the extent of the claims, the investment in this company will be very rewarding. There is a definite possibility that the property may turn out to be among the largest open pit mines in North America."

   The significant doubts which had been cast on the merits of the property several years earlier had apparently been forgotten. Marco's pre-April 10 closing share price more than quintupled by the time the VSE again halted trading on May 22, 1987. In the interim, Marco had issued four news releases. The first, on April 30, disclosed Marco's plans to drill an oil well in San Bernardino, California with another of Mr. Lieberman's private companies, and confirmed the successful completion of an "extensive", six year exploration program which would result in the Company, together with "others", commencing the building of a 5000 tons per day production facility. The next release disclosed the granting of certain directors' stock options, followed on May 11 by a denial of knowledge of any material change which would affect Marco's share price. Finally on, May 12, 1987, the three companies issued a news release reminding investors that Peppa and Philco each had ownership and royalty interests in AGR, the majority owner of the property, and confirmed the imminent start of "limited production". Although the closing share prices of Philco and Peppa had increased since April 10, the last news release assisted in the further enhancement of the share prices so that by the time of the May 22 halt, the share prices of both companies had more than tripled.

   How reliable was the latest report from Mr. Stage on which all this activity was based? The answer to this question lies partially in the nature of Mr. Stage's association with Marco, but primarily in the analyses of his report by a number of experienced mining engineers.

   The evidence indicates that Mr. Stage was not an experienced mining engineer when he was originally retained by Mr. Lieberman to give advice on the drilling of water wells on the property. However, he obviously became a believer in the property's potential at an early stage, and stayed on the project for over six years. During this time Mr. Lieberman provided a home near the property and paid his fees and expenses, and Mr. Stage allegedly developed, with PM Labs, fluxes and assay procedures designed to deal with the "complex ore" which would not yield significant gold values using traditional chemical and fire assay methods. There is no evidence indicating whether Mr. Stage, during this time, worked on any significant gold or silver mining projects other than this property.

   Mr. Ashton, the first engineer who reviewed the report, initially endorsed it. He subsequently acknowledged that he failed to thoroughly examine the relevant facts and data before issuing his endorsement, that the report "has many shortcomings, including misrepresentation of data, faulty assay data, incorrect treatment of assay data, and faulty ore reserve calculations", and that the gold reserve calculations in the report "are not supported in the report and are excessive in view of other deposits in the world."

   The VSE, whose staff has considerable combined experience in dealing with mineral exploration reports, also reviewed the report and advised the company by a June 2, 1987 letter from Mr. Alfred Woo, its Vice-President of Listings, that the report was unacceptable and did "not provide a balanced summary of exploration and development of the property." Mr. Woo objected to Marco's "selectively communicated" results and stated that an acceptable, independent professional review of the company's apparently imminent production plant would be required before trading would be resumed. In response, the companies continued to assure the VSE that the property would be in production by July 1, 1987.

   Two extensive reviews of the Stage report by Mr. Bill Stevenson, P. Eng., Chairman of the Securities Commission's Mining Evaluation Committee and who in addition is experienced in gold exploration in California, were entered into evidence and not disputed. These reviews conclude that the April 10, 1987 letter to shareholders contained information incompatible with the Stage report in key areas such as the area on which the ore reserves are based and the gold and silver values for those reserves. With respect to Mr. Stage's report, Mr. Stevenson concludes that the reported grades of metal have not been substantiated by standard fire assay techniques or confirmed by independent firms, and that he places "no credibility whatsoever on the grade which has been put forward". Mr. Stevenson's review details a large number of questionable engineering procedures, impossible estimates (for example, visual estimates for platinum) and incorrect calculations related to sampling procedures, assay results and reserve calculations. Mr. Stevenson unequivocally rejects the report's fundamental contention that the "novel" assay method pioneered by Mr. Stage and PM Labs could produce precious metal values which no one could reproduce using any of the accepted fire assay procedures, and concludes that the variations in results achieved by Mr. Stage and PM Labs compared to all other independent assays must be due to sampling techniques. Mr. Stevenson's July 28, 1987 review also concludes that, in addition to the shortcomings in the Stage report which were subsequently noted by Mr. Ashton, the report "indicates that Mr. Stage has little or no experience in placer gold work and in economic geology."

   The Stage report has also been reviewed by Dr. Gordon Bacon, P.Eng., an experienced metallurgist. His extensive analysis of the report details a litany of faulty sampling procedures, incorrect assay procedures and calculations, scientific impossibilities and totally erroneous assumptions and conclusions by Mr. Stage about his own data. Dr. Bacon's report and testimony record his direct experience with PM Labs, which he has on occasion been requested to use. He has been denied the opportunity to visit the lab and observe assay methods, and his lab, as well as several others of which he is aware, have on various occasions been unable to reproduce PM Labs' assay results by any commonly accepted method.

   Dr. Bacon summarizes his findings as follows:

   "1. DANIEL B. STAGE REPORT, JANUARY 10, 1987

	Stage displays a complete lack of knowledge of sampling and assaying.
	He has relied on a laboratory (PM Labs, Lancaster, California) that is incompetent. He has compounded the problem by attempting to design assaying procedures himself without the necessary knowledge.
	In his conclusion he has quoted a cyanide recovery that is higher than any achieved in the testwork. He has a silver content in the screen undersize that is higher than he states is in the ore. [i.e. silver was being "created"]
	In general, the report is not professional and not acceptable.

2.

MARCO NEWS RELEASE (the April 10, 1987 to shareholders)

	This is a completely untrue news release.  The amount of gold reported in the ore is 230% more than Stage reports. The amount of silver is 315% more than Stage reports.
	The annual possible production rates are grossly exaggerated based upon the Stage report."

   At the end of the first hearing day in August of 1987, Mr. Williams assured all present that when the hearing recommenced, Marco would present the best evidence possible the first gold bar produced from the property. Unfortunately, such conclusive evidence was not forthcoming. Instead, on September 9, 1987 Marco advised this office through its counsel that "because of" unforeseen problems occurring at the San Bernardino County gold property, operations have ceased". The stated problem was that AGR had run into caliche (a cement-like clay) at a depth of 25 to 30 feet, and as a result of this condition, "the project could not proceed."

   As the December 9, 1987 report of Mr. Stevenson indicates, the existence of caliche, and its effect on mining the alleged deposit, was made known to Marco by the 1983 Stokes-Wetherley report, the 1984 Stage report and the 1987 Stage report. None of these reports indicated that the existence of caliche would present an insurmountable obstacle to mining the property. As Mr. Stevenson notes, "a deposit of this grade and tonage, even if it was composed of 100% caliche, would support the operating and capital costs for a viable operation..."

   In conclusion, the evidence clearly indicates that the various news releases and shareholder communications issued by the companies in April and May of 1987 were more than inaccurate - they were highly misleading and misrepresented their own engineer's results. Furthermore, the engineering report of Mr. Stage upon which at least some disclosure was based was itself so obviously inadequate, particularly in light of abundant contradictory engineering information which the companies had, that reliance on the Stage report was unwarranted, to say the least.

2.

Were Mr. Lieberman and Mr. Williams acting lawfully. responsibly and in the best interests of the companies in connection with the events surrounding the public announcements?

   Mr. Lieberman's evidence is that he required the trading profits to fund the acquisition of production and other equipment for the property. No evidence was submitted that his trading profits were actually applied to such purchases, although Mr. Lieberman did receive, in May of 1987, estimates and invoices totalling under $100,000 from a Dr. George Dumais for materials and labor relating to a "250 yard plant" which Mr. Dumais was apparently assembling for the property. Mr. Lieberman claims that he has spent over $3.5 million on the property to date, that all the companies' shareholders are getting a "free ride", and that he is entitled to sell some of his stock to enable this arrangement to continue.

   This is not a case of a dispute between equally qualified experts about esoteric points of metallurgical analysis and innocently inaccurate news releases.  The eloquent attempt by Mr. Lieberman to characterize it as such is an insidious assault on the principle of full disclosure to the investing public and trivializes the efforts of the VSE to ensure that the principle was adhered to by the companies. News releases signed by Mr. Lieberman and others going back to mid-1981 repeatedly claim wondrous but poorly substantiated results as well as groundless predictions for imminent production. Major reputable firms, such as Lavalin, Gulf and Bechtel were represented to be working on the property but were then quietly forgotten without the outcome being announced.  (The exception, of course, was Bechtel's detailed report, which was entirely negative and was rejected by the companies). The sincerity of even Mr. Lieberman's and Mr. Lewis's faith in the property may be questioned, given that one of the world's alleged major placer gold deposits could be the subject of so much purported analysis for over six years without having attracted so much as one favourable report other than that of Mr. Stage. It is even more incredible that the existence of caliche at 25 feet, which was observed repeatedly since 1983, should suddenly, between hearing dates, emerge as an "unforeseen" barrier to long promised and perpetually imminent production of gold.

   Mr. Lieberman and Mr. Williams appear to be ardent believers in the value of the property and vow to build a mine no matter what the critics say. They simply disregard the advice or findings of anyone who is not a believer. By adopting this attitude, they have effectively precluded any objective assessment of the property from reaching their shareholders or the investing public, and have instead served up a sporadic diet of unsupported results, unwarranted assumptions and unrealistic projections.

   After hearing from Mr. Williams, I am persuaded that his expectations for the property and his faith in Mr. Lieberman's ability to realize those expectations have so thoroughly and permanently clouded his judgement that he is no longer capable of providing to the companies the prudent business advice which the law requires of a director and officer. Mr. Williams freely admits that he knows nothing about mining, and, while stopping short of admitting he is a nominee president, acknowledges that Mr. Lieberman is the undisputed driving force and chief decision maker behind all three companies. Mr. Williams chose to rely only on advice he wished to believe and blithelv issued public announcements on behalf of the companies which not only reflected those beliefs, but significantly misrepresented even Marco's own suspect engineering reports.

   The timely dissemination of information about material changes in the affairs of a public company is not only a legal obligation under section 67 of the Securities Act; it is part of the cornerstone of continuous disclosure upon which an open and informed public market is based.  News releases and shareholder communications are sometimes the most widely disseminated sources of information for the investing public. Misleading news releases inevitably result in misinformed investment decisions, and, when they are intentionally so, can be one of the primary tools in the manipulation of the price of a company's shares.

   The burden of ensuring the accuracy of news releases rests upon the public company and its directors. The VSE has published Policy Statements No. 10/84 and 16/84 which contain easily understood guidelines designed to assist listed companies in meeting their continuous disclosure obligations.

	VSE Policy Statement No. 10/84 states:
	"Releases should be factual and balanced, neither over-emphasizing favorable news nor under-emphasizing unfavourable news. While it is appreciated that releases under this policy may not be able to contain all the details that would be included in a prospectus or similar document, they should contain sufficient details to indicate the nature of the change and to enable investors to formulate investment decisions."

"The failure to disclose appears to be predicated on the mistaken belief that only 'favourable' news must be reported to the investing public. The management of all listed companies are reminded that there must be prompt disclosure of all material changes and that, from a timely disclosure point of view, material unfavourable news must be disclosed in the same timely manner as material favourable news is to be reported."

   In light of the foregoing and Mr. Williams' refusal to acknowledge his errors of judgement in this matter it would be inappropriate to lift the cease-trade order against the companies until Mr. Williams resigns as a director and officer, and undertakes to permanently refrain from acting in an executive, managerial or consulting capacity with those companies.

   In addition, because significant unwarranted price rises and increased trading volumes in the shares of all three companies resulted from public disclosure documents signed by Mr. Williams with such apparent disregard for their accuracy, particularly in light of previous actions and warnings from the VSE (and without any attempt at correction or clarification) a suspension of Mr. Williams' trading exemptions is warranted. Accordingly, effective immediately, the exemptions contained in sections 30 - 32, 55, 58 and 81 of the Securities Act do not apply to Mr. Williams for a period of three years. Although in some cases a longer suspension might be warranted for comparable irresponsibility by an essentially nominee company president, Mr. Williams' long and otherwise exemplary business career, the apparent single mindedness of the companies' entire executive and the absence of any indication that Mr. Williams intended to profit personally by selling his shares into the rapidly rising market mitigate against a longer suspension.

   The circumstances of Mr. Lieberman's involvement are considerably different. Despite Mr. Lieberman's self portrait as a "company builder" with only the best interests of his shareholders in mind, the evidence produced at the hearing Paints a considerably less flattering Picture. While there is no evidence, as Mr. Lieberman correctly observes, that he has in any way misappropriated funds of the companies, it is clear that the strategically timed release of misleading information was directly responsible for share price run-ups from which Mr. Lieberman personally Profited at the expense of misinformed bidders in the market.

   The following factors are germane in considering the extent of Mr. Lieberman's culpability in this matter.

1.		In response to questions from counsel, no plausible explanation has been given by Mr. Lieberman as to the reason for involving the companies in the property in the first place, other than a vague intention to permit shareholders to participate in the rewards of the property's development essentially free of charge. (Mr. Lieberman is the controlling shareholder of all three companies). Mr. Lieberman denies that the purpose of the transfers was to raise exploration and development funds for the property in the public market (which none of the companies have done) and the majority of the expenditures on the property must have been funded by Mr. Lieberman through AGR since Marco's financial statements disclose only modest expenditures in this regard.  The only significant benefit Mr. Lieberman has derived from the transfer of interests in the property to these companies is the ability to sell his controlling shares into the public market at favourable prices.
2.		Mr. Lieberman has deliberately rejected or discredited all independent assessments of the property, none of which supported the findings of Mr. Stage, an engineer of questionable independence and  demonstrated technical disabilities, or of PM Labs, whose assay results no competent assayers have been able to reproduce from property samples using internationally accepted and proven assay techniques.
3.		Mr. Lieberman has maintained effective control of all three companies. He resigned his official position with Marco for the stated reason that he did not want questions about "whether I'm favouring my own or Marco first" and wanted to "be able to deal in an arms length deal" with Marco. (Regardless of the absence of any formal appointment however, under the definition of 'director' in the Securities Act, Mr. Lieberman is clearly a director of Marco, in that he performs the duties of a director). The absoluteness of his control is attested to by Mr. Williams, and it appears that neither he, nor Mr. Ashton, nor Mr. Lieberman's relatives on the board were inclined to offer views on the management of the company, or the nature and timing of the press releases, which differed from those expressed by Mr. Lieberman. For this reason, the burden of responsibility for the companies' actions must rest primarily on Mr. Lieberman.
4.		Mr. Lieberman's track record in running these public companies appears to be less scintillating than he would have his listeners believe. A news release of April, 1977 signed by him on behalf of Marco and Philco indicates that these companies were then building a prototype of a "molecular resonator" which would extract oil from sand and could possibly be used to locate oil and other mineral deposits. This project was later quietly dropped, presumably before it could be applied to the the San Bernardino property. This appears to have been one of Philco's two forays into high technology, although other reported proposals to launch the company into the forefront of the forestry, mining, oil and gas and ranching sectors have also never materialized.
5.		The insider trading reports filed by Mr. Lieberman in connection with his trading in the companies' shares have been erratic and often late. No record exists in this office of any reports being filed in connection with trades of Marco shares for key periods in April and May of 1987. Mr. Lieberman's somewhat contradictory evidence on this point essentially boils down to blaming a member of his staff and this office for incorrectly completing or losing, respectively, his insider reports during this period.
6.		Mr. Liebeman's disregard for the investing public is total. Since he pays the companies' bills, the considers himself to be entitled to do whatever he wishes with the companies. He has threatened to take back Marco's interest in the property, and to starve the companies' cash flow unless the they are allowed to resume trading. He claims Marco's shareholders should be grateful for whatever value he has freely bestowed upon an otherwise worthless entity, and disregards entirely the prospect of losses which may be suffered by misinformed investors who became shareholders at high prices on the basis of his announcements. In this regard, Mr. Lieberman entirely fails to grasp the elemental distinctions between his private and public companies, and treats them equally as his own.
7.		The 1987 exploration results were, as the VSE alleged and Mr. Stevenson's and Dr. Bacon's evidence confirms, little more than a regurgitation of the 1984 results which generated suspensions and strong warnings from the VSE and a corrective news release by the companies. I am not persuaded that Mr. Lieberman is as uncomprehending about sampling procedures and assay results as he would have one believe, or that the gross errors in the shareholder's letter concerning the results in the Stage report were entirely accidental. The lengthy total silence concerning the exploration and development program, broken suddenly by misleading announcements of doubtful results by previously discredited consultants and by representations of imminent production, does not in any way reflect the normal, arduous course of development of any mine of such proportions.  The sudden abandonment of the project for "unforeseen difficulties" which were indicated years in advance and which could only have become more obvious during the years of "extensive exploration and development" puts this entire promotion in its true light.

1.		Mr. Lieberman no longer controls, directly or indirectly the management of the companies and has undertaken to permanently refrain from acting in an executive, managerial or consulting capacity with those companies;
2.		an independent board of directors for each company acceptable to the VSE and this office and approved by a majority of each company's shareholders, other than Mr. Lieberman and associates, is in place; and
3.		a summary, acceptable to the VSE and this office, of the reports of Dr. Bacon and Mr. Stevenson is published by way of a news release and sent to the shareholders of each of the companies.

   This office will entertain applications for orders by Mr. Williams and Mr. Lieberman to dispose of their current share holdings in an orderly manner, or to give effect to the requirements set out in this decision.

N. de GERLDER
Superintendent of Brokers

   The following agreement has been reached between me, Arthur Ashton ("Ashton") and counsel for the Superintendent;

1.		I HEREBY CONSENT to an order of the Superintendent pursuant to section 145 of the Securities Act, S.B.C. 1985, c. 83, as amended (the "Act") withdrawing the exemptions contained in sections 30, 31, 32, 55, 58 and 81 of the Act in the form annexed hereto as Schedule "A".
2.		As the basis for withdrawal of my statutory exemptions, I acknowledge that the facts as set forth in this paragraph are correct:

a)		At all material times Marco Resources Ltd. ("Marco"), American Gold Reserve Inc. ("American Gold") a private American company controlled by Philip Lieberman, ("Lieberman") Philco Resources Ltd. ("Philco") and Peppa Resources Ltd. ("Peppa") held, directly or indirectly, certain interests in the mineral rights to placer claims located in the Chemehuevi valley, San Bernadino County, California ("Property");
b)		At all material times I was a director of both Philco and Peppa along with Lieberman, Lewis Williams, Marc Lieberman (son of Lieberman) and Peppa Martin (daughter of Lieberman);
c)		At all material times I was a member of the Association