Complaint against ajn

A. Introduction

1. We write to you in your capacities as the competent Canadian stock exchange authorities in connection with your responsibility for exercising market surveillance and participant discipline and enforcing regulatory compliance with respect to deceptive and unscrupulous market behaviour by AJN Resources Inc. (CSE AJN) (“AJN”).

• The Complainants are Non-Governmental Organisations and Platforms established in the Democratic Republic of Congo (“DRC”) and whose objectives are, amongst other things, to raise awareness and combat human rights abuses, violations of laws and regulations, fraudulent and dishonest practices and corruption in several sectors of activity including the mining industry in the DRC. The identity and contact details of the Complainants are provided in Appendix A.

B. Facts

1. On the Home page of its website https://ajnresources.com/, AJN states that it is a junior exploration and development company formed for the purposes of acquiring, exploring and if warranted and feasible, developing resource properties.

• Between January 18 and April 15, 2020, AJN issued a stream of news releases regarding (a) its purported right to acquire indirect 30-35% free carried interests on 13 mining licences covering 3,801km2 in the DRC, and (b) the resources allegedly contained in the mineral projects it is seeking to acquire in the DRC.

• On January 18, 2020, AJN issued another news release announcing that AJN signed a Memorandum of Understanding (MoU) with Société Minière de Kilo-Moto SA (“SOKIMO”), whereby SOKIMO proposes to obtain from AJN the conversion of its rights to a direct participation in various gold licences held by SOKIMO into shares in AJN. The said gold licences are located within the Kilo-Moto gold province in the north-east of the DRC. AJN further stated that it intends to raise a minimum of $CDN 20,000,000 via the issuance of securities in the capital of AJN and AJN can secure the direct participation rights in these gold projects held by SOKIMO in consideration of AJN issuing common shares equal to sixty percent (60%) of the issued and outstanding shares of AJN post-financing. AJN further claimed, but without providing any evidence, that the transaction is an arm’s length transaction. On completion of the financing and satisfaction of all conditions, AJN and SOKIMO will conclude a legal and technical due diligence within 90 days of signing of the MOU prior to obtaining all regulatory approvals (including approvals from the Canadian Securities Exchange “CSE”) and execution of a final agreement before closing. The “finders of the projects” will be entitled to a 10% “finders’ fee” payable at the close of the transaction on the acquisition of the Projects, which will be settled by the issuance of AJN common shares payable as follows: 6.5% of the “finder’s fee” will be paid to Dathomir Mining Resources SARL, a DRC private entity with suspicious political connections, and 3.5% will be paid to Klaus Eckhof, CEO, President and a Director of AJN. Prior to the closing of the transaction, AJN intends to conduct an interim financing to raise up to $2.0 million at $0.40 per share for general working capital. AJN also announced in this context its plan for a convertible debenture financing to raise up to $1,200,000. These figures appear to be absolutely ridiculous considering the mineral resources allegedly being acquired by AJN. The 90-day due diligence period provided under the Memorandum of Understanding normally expired on April 17, 2020.

• On March 3, 2020, AJN issued a second news release, without being mandated to do so, titled “Official communication from the Democratic Republic of Congo Minister of Portfolio”,  announcing that the DRC Minister of Portfolio, The Honourable, Professor Clément Kuete Nyimi Bemuna, has officially verified their Memorandum of Understanding with SOKIMO and the Minister of Portfolio has stated that his supervision and support is based on objective assessments and is in accordance with the vision of the President of the DRC, His Excellency, Mr. Félix Antoine Tshisekedi Tshilombo whereby SOKIMO, a commercial company, is free to reflect on any economic model that can ensure its survival and development through dividend access. It should be noted that SOKIMO is actually a 100% state-owned company.

• On April 14, 2020, AJN issued a news release touting the magnitude of the mineral resources allegedly contained in the projects covered by the Memorandum of Understanding signed with SOKIMO under the heading “AJN Resources Inc. Announces Defined Historic Mineral Resources of More Than 6 Million Ounces of Gold and Update on the North Congolese Gold Project”.

• On April 15, 2020, as a result of a review of AJN’s news release dated April 14, 2020 by the Investment Industry Regulatory Organization of Canada (IIROC), AJN issued a corrective notice changing the headline of the April 14, 2020 news release to “AJN Resources Inc. Announces Update on the North Congolese Gold Project”.

• Illegal, manipulative, deceptive and corrupt activities by AJN. 

1. As noted above, this complaint is filed by the Complainants to help the competent Canadian securities authorities to detect, disrupt, and deter securities gross misconduct by AJN.

• The Complainants believe that AJN deliberately engaged in illegal, deceptive and corrupt activities in connection with the representations made on the transaction with SOKIMO, their purported right to acquire indirect 30-35% free carried interests on 13 mining licences in the DRC and the resources allegedly contained in the relevant mineral projects. We provide below the reasons for our contention.

• AJN has not acquired any enforceable right whatsoever under the Memorandum of Understanding dated January 18, 2020 entered into with SOKIMO which would have justified its various news releases.

• It is puzzling and highly suspicious to note that in its news release dated January 18, 2020, AJN claimed that SOKIMO “proposed” to obtain from AJN the conversion of its rights to a direct participation in various gold licences held by SOKIMO into shares in AJN and, at the same time, announced that the so-called “finders of the projects” will be paid a 10% “finders’ fee” at the close of the transaction. If such proposal has been made directly to AJN, it is unclear why commissions would be payable to certain individuals, including the President and Director of AJN and a third-party company, Dathomir Mining Resources LLC.

• AJN lacks the necessary financial resources to carry out large-scale projects comprised of the 13 mining licences covering 3,801km2. AJN is not a company with mining experience. Currently, AJN does not own any mining asset other than an option right to acquire an exploration-based lithium mine of the Salt Wells, Nevada, from Great Basin Oil LLC. AJN has not developed any gold or other mineral deposit in the past. Nowhere on AJN’s website is it mentioned that the company has already carried out a single mining operation, except for drilling its first drill hole at the Salt Wells lithium project referred to above, as announced in its news release dated August 21, 2019.

• According to Article 182 of Law No. 007/2002 of July 11, 2012 as amended and supplemented by Law No. 18/001 of March 9, 2018 relating to the mining code (the “DRC Mining Code”), when a “State portfolio company contributes a mineral deposit, either to an existing company or in view of the establishment of a new company, the equity interest of such company to the existing company or the company to be established is set according to the actual value of the mining deposit being contributed…”.

• The relevant mining licenses being exploitation permits, AJN is required to demonstrate, in accordance with Article 71-b of the DRC Mining Code, the existence of the required financial resources, including source of finance, to successfully develop the projects according to a financing plan for the development of each mine, construction and exploitation works as well as the rehabilitation plan for the sites upon closure. Moreover, the shareholders of AJN will be required to provide equity financing which cannot be less than 40% of the project finance.

• AJN has violated the information rules applicable to companies listed on the Canadian Securities Exchange while reporting results without any valid technical basis. Indeed, AJN has not conducted and financed any technical study or any relevant technical due diligence in respect of the 13 mining licences and is using misleading technical data of dubious validity gathered here and there with a view to induce the subscription, sale or purchase of its shares by investors.

• AJN also allegedly plans to use a nominee company to justify a grotesque financial scheme, which is akin to money laundering.

• Suspicion of corruption would weigh on the Memorandum of Understanding dated January 18, 2020 entered into with SOKIMO to acquire all of SOKIMO’s interests in the mining projects referred to above. Knowing the operating procedures of certain operators and agents involved in this transaction, the Complainants believe, based on information received from reliable sources, that AJN officers and certain other affiliated people would have promised undue and illegal benefits to SOKIMO officers as soon as the mobilization of funds from the Canadian Securities Exchange is effective.

• In light of the foregoing, the Complainants believe that the reported actions constitute a scam and a serious violation of the relevant provisions of both the CSE Trading Rules and the Universal Market Integrity Rules, of the Investment Industry Regulatory Organization of Canada (IIROC).

• To prevent the completion of this mafia-like transaction that could cause serious harm to both investors and the Congolese people, the Complainants urge the regulatory body to not give its approval to AJN in relation to this transaction without first conducting a thorough investigation and inquiry into the conduct, business and affairs of AJN as they relate to the transaction being negotiated by AJN with SOKIMO and to take, if warranted criminal, civil action or any other relevant sanction.

Dated: April 30, 2020

Respectfully submitted,

The Complainants listed below.

Appendix A

Names and contact details of the signatory organizations and platforms

N°	Names	Organizations	Contacts
1.	Ernest MPARARO	LICOCO	+243816049837
2.	Franck FWAMBA	TOUCHE PAS A MON COBALT	+243810348785
3.	Henri MUHIYA	CERN/CENCO	+243810526141
4.	King MUSHILANAMA	HDH	+243997013407
5.	Timothée MBUYA	JUSTICIA	+243994075131
6.	Jeef KAZADI	PRESS-CLUB RDC	+243810241942
7.	René NGONGO	OCEAN	+243998334500
8.	Schadrack MUKAD	COORDINATION CADRE DE CONCERTATION DE LA SOCIETE CIVILE DU LUALABA	+243815388040
9.		CASMIA	+243992520444
10.		LINAPEDHO	+243819842267
11	Mike LAMEKI	ESPOIR ONG	+243978646773
12.	Georges BOKUNDU	SARW	+243817070127
13.	Devoe NGOY	RND ASBL	+243816092845
14.	Jean-Luc KAYOKO	PODEFIP	+243815888985
15.	Antoine MUNGU ETSONI	SOCIETE CIVILE FORCES VICES DE WATSA	+243813611733
16	Jean-Cephas GOMISAME	CORDINATION TERRITORIALE DE LA NOUVELLE SOCIETE CIVILE DE WATSA	+243823480365
17.	Dieumerci THUAMBE ADUBANGO	SECRETARIAT NATIONAL DU RESEAU DE COMMUNICATEURS DES RESSOURCES NATURELLES	+243817417307

Media Contacts :

– Ernest MPARARO, Email : licocordc@gmail.com

– Dieumerci THUAMBE ADUBANGO, Email : dieumercilapresse@gmail.com

– Franck FWAMBA, Email : pressclub.rdc@gmail.com

– Antoine MUNGU, Email : antoinemunguetsoni@gmail.com

– Henri MUHIYA, Email : hmuhiya@gmail.com

– Georges BOKUNDU, Email : GeorgesM@sarwatch.org

Adresses :

– N° 14, Av Lwango, Quartier 1, Ndjili, Kinshasa, RD Congo.

– N° 129, Av Kasaï, Lubumbashi, Haut-Katanga, RD Congo.

– N° 4, Av de la Justice, Quartier Bankoko, Commune Mbunya, Bunia, Ituri, RD Congo.

– N° 2, Rue Planteki, Bld Lumumba, Commune Kibali, Watsa, Haut-Uélé, RD Congo.

– Bureau de la Société Civile, Immeuble John Namate, Quartier 75, Commune Mongali/Durba,

  Haut-Uélé RD Congo.

– Bureau de l’ONG SAIPED (non loin de la Radio Rhinocéros), Quartier Farange, Cité de Faradje,

  Haut-Uélé, RD Congo.

– N° 533, Route Likasi, Q/Joli Site, Commune de Manika, Kolwezi, Lualaba, RD Congo.