History
Commerce Group spent years trying to find a partner or buyer for its El Salvador gold mine while auditor troubles mounted and its arbitration claims against El Salvador were dismissed.
2003-2006: Licenses, and auditor troubles
Commerce Group's story centered on the San Sebastian Gold Mine in El Salvador. On March 3, 2003, the country's Ministry of Economy gave the company a renewed license to extract precious metals from the mine, plus an exploration license covering 42 square kilometres around it. The company said the mine had produced over one million ounces of gold and that it believed about four million more remained. That was its own belief, not a verified reserve figure. A further 45-square-kilometre exploration application, called Nueva Esparta, was still pending. In August 2003 the licence was formally handed over. That filing described it as twenty years, though the March filing had said 30, and no explanation was given. The company said it was still raising money to expand its mill and plant and to build an open-pit heap-leach operation, which extracts gold by trickling chemicals through piled ore.
Then the paperwork slipped. In January 2005 its auditor resigned because he was not registered with the US audit regulator, leaving the audit of the March 2004 accounts incomplete. His replacement, Moore & Associates, resigned within months, saying it could not do the audit on time, and Chisholm, Bierwolf & Nilson was engaged in May 2005. The company's shares were removed from the OTC Bulletin Board in January 2005 for late filings and traded on the Pink Sheets. In May 2006 its exchange filed to remove a class of its securities from listing. The record for 2003 to 2006 does not show completed financing.
2008-2011: Deals that did not close, and a legal fight
In March 2008 Commerce gave Manti Holdings LLC an exclusive option to review San Sebastian, with a possible private placement of 1,300,000 shares at $1.00 each to fund drilling. In July 2008 it also signed a non-binding letter of intent to acquire Voter Communications, Inc. for 270 million new shares. Closing would have required Commerce to give up the mine, replace its board, and raise authorised shares to 500 million. On July 30, 2008, Manti withdrew. No definitive Voter agreement had been reported by the latest record, and the company said it was still seeking a partner or buyer for the mine.
The record is then quiet until August 2010, when auditor Chisholm, Bierwolf, Nilson & Morrill resigned without giving a reason. Its reports for the years to March 2009 and 2010 had carried going-concern warnings, meaning doubt that the company could keep operating. Mark Bailey and Company was appointed. In April 2011 the US audit oversight board revoked the former auditor's registration, so its report on the March 2010 accounts could no longer be relied on. Commerce said it believed its figures were accurate and no restatement was needed, but that its annual report for the year to March 31, 2011 would very likely be late.
On July 12, 2011, Commerce applied to annul the international arbitration tribunal's decision dismissing its claims against El Salvador's government. It argued the tribunal exceeded its powers and failed to give reasons. As of July 14, 2011, that application was undecided, the mine still had no partner or buyer, and the company still owed secured, on-demand notes to a related-party retirement account.
Written from the 10 story beats below (2003 to 14 July 2011), which come from the company's own announcements and filings.