BSGR execs signed over stake to Conte's wife for Simandou concession

BSGR executives signed over a 5% stake in the company to a wife of a former Guinean dictator to acquire two blocks of the Simandou iron ore project, according to documents seen by a source close to the Guinea government.

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Documents dated February 20, 2006, suggest that the Guinean arm of BSG Resources – the mining company controlled by Israeli diamond tycoon Beny Steinmetz – promised to transfer 17.65% of its “capital” to Pentler Holdings, registered in the British Virgin Islands.

According to the documents, Pentler would then transfer 33.3% of its capital to Mamadie Toure, the youngest of late Guinean dictator Lansana Conte’s four wives – effectively handing her a 5% stake in BSGR Guinea.

A source close to BSGR confirmed that Frederic Cilins, the BSGR agent arrested on Sunday April 14 by US investigators, was a director of Pentler.

The transfer of ownership formed a “partnership for the development and operation of a portion of the Simandou iron ore deposit” between BSGR and Toure’s company – Matinda & Co Ltd – the documents seen by Steel First suggested.

A further document, dated February 27, 2008, said that BSG Resources was “committed to giving a total of $4 million as a commission for obtaining blocks 1 and 2 of Simandou” to Matinda & Co.

That document also states that Matinda & Co would “take all necessary steps to get the authorities to obtain the signature to hand over the said blocks to BSGR Guinea”.

Later documents confirm that additional payments were made to Toure and Matinda & Co.

Conte died in December 2008, after 20 years as president of the West African country. His death came just days after BSGR attained the concession to blocks 1 and 2 of the multi-billion-tonne Simandou reserve.

Conte stripped the concession from Anglo-Australian miner Rio Tinto in August 2008.

A 2006 video obtained by non-governmental organisation Global Witness and posted on its website early on Friday April 19 allegedly shows senior BSGR officials meeting with Toure and discussing drilling plans for Simandou, despite the concession still being held by Rio Tinto at the time.

Global Witness said that the contracts, video and FBI indictment provided “compelling evidence” that BSGR obtained its rights to Simandou through illegal means.

BSGR has argued that it never had any business dealings with Toure.

“BSG Resources has over 6,000 employees and operates in 12 countries globally… We are not aware of any allegations against any of our employees,” it said in a statement emailed to Steel First on April 19.

“Allegations of fraud in obtaining our mining rights in Guinea are entirely baseless,” it added.

The miner said that it was confident that its position in Guinea would be “fully vindicated”.

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