Black Goose Holdings (BGH) was the centre of controversy during last week’s Gitxsan Summit and concerns arose regarding the Gitxsan Treaty Society’s involvement in the, now worthless, investment of $1 million.
Around four years ago the hereditary chiefs decided to invest in BGH, a Calgary-based company, that has existed since 2006, through a Gitxsan holding company, Del ga goka, Elmer Derrick being the sole trustee.
BGH became an albatross, Del ga goka with it, when the natural gas industry tanked, but the way the investment was initiated is regular business, according to Gordon Sebastian, GTS executive director.
“The hereditary chiefs decided to invest after much discussion,” Sebastian said.
“Then they set up the Del ga goka corporation to deal with any dividends.”
Between June 2008 and July 2009 the price of natural gas fell dramatically.
The Black Bird Petroleum Corporation (BBP), a Nevada-based company, signed a letter of intent with BGH on Feb. 25, 2009 stating that BBP would take 100 per cent control of BGH for a fraction of the net worth, which was approximately $1 million at the time.
The LOI included all BGH assets, intellectual properties, seismic data and a current financial audit.
Upon sale BGH was supposed to receive 20 per cent of net income “resulting from activities relating to the assets required,” according to an unaudited financial statement of BBP on Jul. 3, 2009.
Confusion over the matter remains to date.
“When did our investment in Black Goose become worthless?” Neil J. Sterritt asked Jim Angus, GTS board chair at the summit.
“Within a year of the investment, I believe,” Angus said.
Questions remained about why BGH is not a line item on any yearly GTS financial statement.
“Once the money was moved GTS’s role in the investment was over,” Sebastian said.
But Sterritt doesn’t believe the $1 million in shares could just evaporate based on the sale of BGH.
The signatures on the Feb. 25, 2009 binding LOI are Angus Jenkins, BGH and Antonio Treminio, BBP.
“Let’s assume that Black Bird’s shares were 5 cents when [Treminio] bought the 30 million shares,” Sterritt said.
“That’s $1.5 million and he got the Black Goose assets.”
BBP, listed as BBRD: OTC in the stock market, fluctuated between 40 and 50 cent shares at the time of the LOI and is currently listed at 1 cent per share, according to stockpickr.com.
“With any investment you take a risk,” Sebastian said.
Sterritt advised the Chiefs to use the BGH experience.
“When a person is a trustee of a holding company, you have a high duty to know where your assets are and what is happening to them,” Sterritt said.
“The fact that Del ga goka was holding shares should have required a trustee to keep an eye on the shares.”
The incident is being taken as educational by the Gitxsan Chief’s Office.
“That was before we had the [Gitxsan Development Corporation] and the lesson has been learned,” Beverley Clifton-Percival said.
“We now have the corporate expertise needed to do investments and I’m pretty confident we have that in check.”
Clifton-Percival added it was an opportunity to buy into aerial-based technology that allowed for minimal impact to the environment during the exploration for natural gas beneath the surface of Gitxsan land.
“It had good potential and we needed to start producing our own data,” she said.
“The government hasn’t updated environmental data since the ‘70s.”
Sterritt demanded that all financials be made clear to the Gitxsan people.