THE MINING INDUSTRY in Canada has long been associated with shady business practices and dodgy stock-market deals. Gold mining in particular has always produced a frenzy of speculation. The promise of the “big find” has attracted a disproportionate number of unscrupulous individuals and companies with a get -rich-quick mentality.

Historically, it was individual prospectors who searched for precious metals such as gold. After the growth of mining investment companies in the post-World War II period, however, individuals invested in an exploration and mining company which financed operations by selling shares on the stock market.

Spectacular financial gains are often produced by speculation on the potential value of the mineral deposit before any metal is actually found. Mining companies thus have a great incentive to exaggerate, misrepresent, or ...