Former Trump cabinet member has $90,000 consulting deal with questionable mining company

Jim McNair contributed to this report

Former Interior Secretary Ryan K. Zinke, who resigned last year amid multiple ethics investigations, is a consultant for a mining company created and financed by people now facing fraud charges.

Zinke also is on the board of directors at the company, U.S. Gold Corp. (Nasdaq: USAU). It controls undeveloped mineral properties in Nevada and Wyoming. A Securities and Exchange Commission filing shows that Zinke is to receive $90,000 annually in cash and stock, plus up to $30,000 for expenses. His consulting agreement calls for him to assist the company with investor relations, government relations and other tasks.

U.S. Gold went public in May 2017 by combining with Dataram Corp., a struggling maker of computer memory products whose shares were listed on the Nasdaq exchange. The so-called reverse merger was engineered by financier Barry C. Honig, who has created or bankrolled dozens of small public companies over the past decade.

Sharesleuth’s investigation found that Honig and several associates had acquired a large stake in Dataram prior to the deal, and that one of them – John R. Stetson – also managed a limited liability company that was U.S. Gold’s principal shareholder. Their role on both sides of the transaction was not disclosed in SEC filings, nor was their sale of millions of dollars in stock in the months before and after the merger.

We also found that U.S. Gold’s top executives previously were officers or directors of numerous other companies backed by Honig’s group – none of which produced long-term gains for ordinary shareholders.

The SEC brought fraud charges last September against Honig, Stetson and 18 other individuals and entities in connection with alleged “pump and dump” schemes at three other public companies. The complaint said the group concealed its control of those companies, failed to disclose significant share transactions, manipulated stock prices and secretly paid writers to produce misleading promotional articles.

The SEC said the schemes generated $27.1 million between September 2013 and May 2016. The Dataram-U.S. Gold merger was announced in June 2016. It touched off a surge in trading that allowed Honig and a handful of associates to unload most of their stock, likely collecting more than $5 million.

U.S. Gold’s stock has declined by more than 90 percent from its peak that year (when adjusted for two splits), meaning any retail investors who bought on news of the merger and held their shares have lost nearly all of their investment.

A lawyer for one of the defendants in the SEC case said in a court proceeding that the Justice Department is conducting a parallel criminal investigation into the Honig group’s activities.

Honig agreed to a settlement with the SEC last month that bars him from acquiring more than 4.99 percent of any penny stock company’s shares, from marketing or promoting any penny stock company, or from exerting control over any penny stock company. The amount he must pay in disgorgement, penalties and interest will be determined later, but easily could exceed $10 million, based on his share of the stock sales.

Two of Honig’s co-defendants — who also were big Dataram shareholders at the time of the U.S. Gold deal – settled earlier this year, agreeing to pay a combined $2 million.



U.S. Gold’s stock gained 50 percent in the first six weeks after Zinke’s appointment, topping out at $1.53 on May 21. Spot and futures prices for gold were little changed in that period.

U.S. Gold has played up Zinke’s ties to President Donald Trump. Soon after he joined the company, he and Chief Executive Edward M. Karr participated in a livestreamed investor presentation titled “Making American Mining Great Again.”

The presentation was hosted by a stock-promotion site, U.S. Gold’s prospects also were touted in recent months by three other promotion sites, all of which share common ownership.

Each reported in disclosure statements that they had received $15,000 as compensation for their campaigns.

Small Cap IR USAU May 2019


U.S. Gold announced last month that it had raised $2.5 million in new capital by selling preferred stock that the holders can convert to common stock. The company said the money would use the money to advance its drilling and exploration program.

U.S. Gold’s stock price has been falling since that placement, and closed Wednesday at 99 cents a share. That’s only a penny higher than the closing price on the day that Zinke’s consulting deal took effect.

SEC filings show that U.S. Gold is a long way from becoming a company that actually mines and produces precious metal. It said in its latest financial report that it had just three full-time employees and no part-time employees as of July 26. The address it lists as its headquarters is a private mailbox at an Elko, Nev., business called Goin’ Postal.

U.S. Gold’s CEO, Karr, is not based in Elko. He operates from Geneva, Switzerland, where he runs an asset management company.

U.S. Gold has said in investor presentations that it will need more than $100 million to develop its Copper King prospect in southeastern Wyoming. That state has no large-scale gold mines, and hasn’t had any for decades.

U.S. Gold had just $2.2 million in cash at the end of April, according to the financial report it filed last week. That means that even with the extra money it raised in June, it still has a mere fraction of the required funding.



Zinke is no stranger to the mining business. As U.S. Gold noted in its April press release on his appointment, he has a bachelor’s degree in geology, as well as a Masters of Business Administration in finance.

Prior to becoming Interior Secretary, Zinke was one of Montana’s representatives in Congress, sitting on the House Natural Resources committee.

As Interior Secretary, he pushed to boost oil and mineral production on federal lands. He resigned from that position in December amid scrutiny about multiple uses of government aircraft for questionable trips.

The Justice Department also is investigating whether he lied to his own department’s inspector general about his real estate dealings in Montana, and about his role in reviewing a casino project that was proposed by Native American tribes in Connecticut.

According to news reports this week, the Justice Department and the Interior Department’s inspector general also are looking into Zinke’s use of a private email account for official business.

Zinke signed on with another private employer shortly after leaving the Trump administration. In January, he became managing director of Artillery One, a privately held investment firm focusing on cybersecurity, cryptocurrency and blockchain.



Karr has a long history of involvement with public companies created or financed by Honig and his associates. SEC filings show that Karr has been an officer, director or investor in at least 14 such companies.

The list includes Mabvax Therapeutics Holdings Inc. (OTC: MBVXQ), one of the companies at the heart of the SEC fraud case, and two others facing more recent SEC investigations.

U.S. Gold’s chief operating officer, David S. Rector, also has been involved in more than a dozen companies connected to Honig. Four of them were publicly traded mining companies. SEC filings show that none ever produced a single dollar of revenue, or a single ounce of commercial gold, silver or copper.  

U.S. Gold did not respond to a list of questions sent to its email address for investor-relations inquiries.



We found similarities between the violations outlined in the SEC fraud complaint against Honig and his associates and the events at Dataram, particularly around the time the merger was announced and the time it was completed.

Documents show that Honig, Stetson and at least one other defendant in the case converted preferred stock in Dataram and, later, U.S. Gold, into millions of new common shares, then sold them. They did not report those acquisitions or disposals, possibly in violation of SEC rules. As a result, ordinary investors had no way of knowing the company’s biggest shareholders were cashing out.

We estimate that members of Honig’s group collected $8 million to $10 million from their share sales in 2016 and 2017.  More than half of the sales took place long before Dataram and U.S. Gold completed their merger – the sole reason for renewed investor interest.



Dataram was a New Jersey-based maker and marketer of computer memory boards and related products. Although the company had $25 million in sales in the fiscal year that ended April 30, 2016, its annual revenues had fallen by almost half since peaking in 2011.

Even at its high point, Dataram was unprofitable. The company posted cumulative losses of more than $20 million in those six years.

At the end April 2016, Dataram had just $56,000 in cash, was the subject of a “going concern” warning from its auditor and was facing delisting from the Nasdaq because its stock was languishing well under the exchange’s minimum bid price of $1 a share.

Our investigation found that the Honig group’s effort to gain control of Dataram and profit from its transformation into U.S. Gold was more than a year in the making.



Here’s how the Dataram-U.S. Gold deal unfolded:

  •  Honig and his associates acquired a significant stake in Dataram in 2015, in part by purchasing an existing investor’s preferred stock. Those shares were convertible to common stock.
  • Honig and Stetson, and perhaps several associates, also bought common stock in 2015, through a private placement at $1 a share.
  • Honig’s group got two seats on Dataram’s board of directors. It used its influence to get the company to greatly improve the conversion terms on the preferred stock – not once, but twice.
  • After setting themselves up to receive millions of extra shares for no additional consideration, Honig and his associates arranged for Dataram to merge with the mining company they also controlled.
  • Just before and just after that deal was announced, Honig and his partners converted most of their preferred shares to common, without filing any amended SEC disclosure forms required for activist investors owning 5 percent or more of a company’s shares. Or, in an alternative scenario, they flipped the preferred shares to allies who converted them in small enough amounts to get around disclosure rules.
  • Someone paid tout sites to promote Dataram’s stock. One of the campaigns was timed to coincide with the mining deal, and almost certainly helped boost Dataram’s trading volume and share price. The tout reports emphasized the claim that Dataram would be gaining $160 million or more in assets through the merger.
  • Throughout the spring and summer of 2016, Honig, his associates and certain other investors unloaded large amounts of the newly issued common stock they received through the conversion of preferred stock. We estimate that the proceeds of those sales exceeded $5 million.
  • Once the merger with U.S. Gold was completed, Stetson’s Copper King LLC repeated that process, converting preferred stock issued in the deal into millions of additional common shares and selling them on the open market. That was aided by a new round of paid touting, as well as bullish articles planted on financial sites. We estimate the sale of those 4.5 million shares generated $3 million to $5 million.
  • U.S. Gold raised a further $5 million in January 2018, selling preferred stock that was convertible to 2.5 million common shares at a price of $2 each. SEC filings never identified the buyers. But the financing was accompanied by another series of planted promotional articles, which suggests that it was part of the broader scheme.
  • SEC filings show that two-thirds of the new preferred stock was converted into common stock within a few weeks of the placement. The rest was converted in the three months that followed. The 2.5 million shares amounted to almost 15 percent of U.S. Gold’s outstanding stock. But once again, no one reported owning even 5 percent of its shares. We estimate that the sale of the common stock issued in last year’s transactions generated $5 million to $6 million in additional proceeds.
  • The participants in the 2018 placement also got warrants to buy 1.25 million additional shares at $3.30 each. But under the terms of the investment agreement, if the company sold shares for a lower price at a later date, the exercise price would be reduced to match that. Thus, the warrants now can be turned into common stock for $1.14 each, which means they are now only slightly out of the money.


The surge in Dataram’s share price and trading volume after it announced the U.S. Gold deal was aided by some of the same promotional sites that touted the stock in April and May of this year.

Their reports in 2016 focused on the claim that Dataram was acquiring mineral reserves worth $160 million, or more than 20 times the company’s market capitalization at that time.

Although a consultant had estimated in 2012 that the minerals in the ground at U.S. Gold’s Copper King prospect had a “net present value” of $160 million, that is not the same as the property’s actual worth.

SEC filings show that U.S. Gold paid just $4.2 million in cash and stock for all of its properties — none of which had been deemed worthy of significant development expenses by their previous owners.

At its current share price, U.S. Gold’s outstanding stock has a market value of more than $20 million.



We found that just before and after the U.S. Gold merger announcement, Honig, Stetson and another investor, a Liechtenstein-based hedge fund called Alpha Capital Anstalt, converted preferred stock in Dataram into millions of common shares.

Alpha Capital was charged alongside Honig and Stetson in the September fraud case. It appears from subsequent SEC filings that all three quickly dumped most of the newly issued Dataram shares into the public market, which was inflated by the merger-related touting. We estimate they collected at least $5 million in that wave of selling.

Dataram did not clearly disclose those conversions — or their dilutive effect on the interests of other shareholders — in the press releases it issued about the U.S. Gold deal.

Nor did the company note that Stetson, who had reported owning an 8.8 percent stake in Dataram in a September 2015 SEC filing, also was the manager of an entity called Copper King LLC.

That LLC was U.S. Gold’s biggest shareholder at the time it entered into the merger agreement.  It wound up with preferred stock that was convertible to 4.5 million common shares of the combined company, or roughly 35 percent of the total outstanding.

SEC filings show that most of the preferred stock was converted between May 1, 2017 and July 27, 2017.  Under SEC rules, shareholders who own 5 percent or more of a company’s common stock must publicly disclose that, and also must also disclose changes in their stakes.

Stetson’s LLC never reported owning 5 percent of U.S. Gold, much less 35 percent. That suggests that it either failed to comply with disclosure rules, or converted preferred stock in amounts small enough to avoid that threshold, then quickly sold the newly issued common shares. It’s also possible that the LLC distributed some of the preferred stock to unknown affiliates prior to conversion.

We estimate that the sale of those shares generated $3 million to $5 million.

It’s unclear who actually got that money. The SEC said in its complaint in the pump-and-dump case that Stetson functioned as a front for Honig, buying and selling stock in the three target companies through another entity called HS Contarian Investments LLC.

It said that even though Stetson was listed as manager, Honig had a 94 percent ownership interest.



In roughly same three-month period in 2017 when Copper King LLC was converting its preferred stock in U.S. Gold, a small group of writers posted more than a dozen bullish articles about the company on, and other financial sites (see examples here, here, here and here).

Although those pieces were presented as independent research, we found that they actually were among nearly 600 “stealth promotion’’ articles about Honig-backed companies that the network produced from 2012 to 2018 (see our previous investigation on that subject here).

That group included more than 30 purported writers we determined to be fictitious. At least four had bylines on articles about U.S. Gold.

One of the most prolific real authors, John H. Ford, was named as a defendant in the September fraud case. The SEC said Honig and his associates paid him more than $100,000 for his undisclosed touting.

Ford produced bullish articles on two of the three companies that the SEC alleged were pump-and-dump vehicles. He invested alongside Honig and other defendants in the third. Those companies were:

  • Mabvax, a biotech company that was seeking to develop treatments for glioblastoma, pancreatic cancer and other ailments. It filed for bankruptcy in March.
  • MGT Capital Investments Inc. (OTC: MGTI), which was an intellectual-property licensor before moving into cybersecurity  through a set of acquisitions orchestrated by Honig’s group.
  • BioZone Pharmaceuticals Inc., which had been trying to  commercialize a new drug-delivery platform. It now is known as Cocrystal Pharma Inc. (Nasdaq: COCP).  



One of the key defendants in the SEC’s fraud case — Dr. Phillip Frost, chairman and chief executive of Opko Health Inc. (Nasdaq: OPK) — was the first to settle.

Frost, a billionaire healthcare entrepreneur, and Opko were large shareholders in Mabvax, BioZone and Cocrystal. Frost agreed in December to pay $5.5 million in disgorgement, penalties and interest. Opko also settled, paying $100,000.

Unlike Frost, the company did not sell any of its shares during the periods in which the SEC alleged that the schemes were in motion.

Alpha Capital settled with the SEC in February, paying a little more than $900,000. Another longtime Honig associate, Mark E. Groussman, settled at the same time, for just over $1 million.

Groussman, too, was a large Dataram shareholder. He reported in a filing on June 13, 2016, that he owned 6.9 percent of the company’s stock. That was the same day the U.S. Gold deal was announced.

Groussman made the disclosure in a Form 13G filing, asserting that he was a passive investor in the company rather than an activist who was involved in its transformation. Under SEC rules, he should have submitted another filing a year after his first, updating his holdings. He never did so. Nor did he ever report that his stake had fallen below 5 percent, the threshold for continued ownership filings.



Sharesleuth reported last year on the Honig group’s hidden activities at three more public companies.  They are:

That two-part investigation detailed a series of fortuitously timed financing deals and undisclosed share sales that generated more than $100 million for Honig, Stetson, Frost, Groussman and others (see those stories here and here). PolarityTE and Riot Blockchain have disclosed that they are the subjects of formal SEC investigations. Marathon Patent’s most recent annual financial report did not mention an SEC inquiry or subpoena.  



We found that U.S. Gold’s chief operating officer, Rector, served briefly as CEO of PolarityTE’s predecessor, a money-losing video game distributor called Majesco Entertainment Co. (formerly Nasdaq: COOL). He was appointed to that position in 2015, shortly after Honig’s group injected cash into the company. Honig took over the top position a few months later, but Rector remained on the company’s board.

Like Dataram, Majesco reinvented itself in early 2017 by merging with a company in a completely different field. As PolarityTE, it now is seeking to commercialize new techniques for skin-, tissue- and bone-regeneration to aid burn victims, accident victims, diabetics with foot ulcers and people with other injuries and ailments.

Our analysis of the Honig group’s activities at PolarityTE found that Honig, Stetson, Frost and Groussman have sold more than $40 million of PolarityTE’s stock since 2017, in some cases without proper disclosure.

By comparison, PolarityTE generated just $3 million in revenue in that time, and incurred more than $200 million in losses. Its stock is down more than 80 percent from its peak last summer.

PolarityTE said in March that it was the subject of an SEC investigation focused partly on its dealings with Honig and Stetson, who had been the company’s chief financial officer and chief investment officer.

(Disclosure: Chris Carey, editor of, does not invest in individual stocks and has no position in any of the companies mentioned in this report. Mark Cuban, owner of LLC, has a short position in the shares of PolarityTE.)

U.S. Gold’s chief executive, Karr, was a director of Majesco from September 2015 until December 2016, the same month it agreed to merge with PolarityTE. SEC filings show that Karr also participated with Honig, Stetson, Groussman and others in an April 2017 private placement at Bioptix Inc., which morphed into Riot Blockchain six months later.

John R. O’Rourke III, who became Riot Blockchain’s chief executive in November 2017, was charged in the SEC case alongside Honig, Stetson and Groussman.

It is unclear how much Karr collected for his Riot Blockchain stock. If he waited to cash out until the company’s shares took off in late 2017, he could have cleared more than $2 million.

Even after a recent run fueled by an increase in bitcoin prices, Riot Blockchain’s stock is down more than 90 percent from its peak.

Our investigation last year found that Honig sold nearly all of his Riot Blockchain shares in October and November of 2017, generating more than $17 million. Honig, who had previously reported owning nearly 10 percent of the company’s shares, did not disclose those sales promptly, in apparent violation of SEC rules.

We found that Stetson, Groussman and an investment company managed by Honig’s brother, Jonathan Honig, likely sold more than $20 million in additional shares through early 2018.

SEC filings show that Riot Blockchain generated less than $10 million in digital-currency revenue in the first 15 months of its existence. Its combined net losses for that period totaled nearly $70 million.

Another U.S. Gold’s insider, director Andrew J. Kaplan, also was a board member of Majesco, Bioptix and Riot Blockchain. He resigned from Riot Blockchain’s last October.

In addition, the chairman of U.S. Gold’s board, John N. Braca, was a longtime director of Sevion Therapeutics Inc. (formerly OTC: SVON), another company financed by Honig and Frost.

Rector was Sevion’s CEO from January 2015 to December 2017, when the company became Eloxx Pharmaceuticals Inc. (Nasdaq: ELOX) through a reverse merger that Honig helped arrange.

Honig, Frost and Opko all were large shareholders of Sevion, and wound up with smaller stakes in the combined company because Eloxx’s owners got the bulk of the equity.

An investor in Sevion filed suit earlier this year against Rector, Honig and Eloxx, alleging that they defrauded him prior to the merger.

He said in his complaint that Rector and Honig persuaded him to convert preferred stock in Sevion to common stock in the months leading up to the merger, at a sweetened price of 25 cents per share, which they promised would be the best deal offered.

The investor said he later learned that Honig had purchased the rest of the company’s outstanding preferred stock from other holders, and got a conversion price of 10 cents per common share.

At that lower conversion price, the investor who sued would have received the equivalent of 60,000 additional shares in the merged company. The extra shares would have had a market value of $1.4 million when Eloxx’s stock price topped $24 last summer.

Shares in the drug-development company now trade for around $8. The lawsuit raises the additional question of why Honig never reported the additional shares he received through the conversion of his preferred stock, since he already was a 5 percent shareholder and clearly was involved in laying the groundwork for Sevion to become Eloxx.



Honig reported in an initial ownership filing in October 2015 that he owned 257,838 of Dataram’s common shares, or 7.8 percent of the total outstanding at the time.

He said that stake excluded 350,500 shares of Series A preferred stock and 800,000 related warrants. Those securities ultimately could have been converted to more than 3.3 million common shares (not adjusted for subsequent reverse stock splits).

Honig also reported holding warrants attached to notes that Dataram issued in 2014. That suggests he likely held those notes as well. They were retired for additional preferred shares in early 2016.

Honig asserted in his disclosure filings that he was a passive investor, rather than one actively seeking to influence Dataram’s direction. That was the same status he claimed at BioZone and MGT Capital, when the SEC alleged that he was secretly dictating activities at those companies.

By denying that he was actively involved in Dataram’s merger with U.S. Gold, Honig avoided having to submit amended ownership filings every time he acquired shares or sold them. Even as a passive investor, Honig should have submitted an amended disclosure form if he boosted his ownership position above 10 percent by converting preferred stock to common. He never did so.

Our analysis of Dataram’s changing share counts found that the amount of stock it issued through conversion transactions around the time of the merger announcement was so large that the recipients would have owned more than 50 percent of the company in early July 2016.

Unless Honig and others sold most of the new shares immediately after conversions, at least some of the recipients would held stakes big enough to trigger new or updated SEC disclosure filings.

As we noted previously, Stetson said in an initial Form 13G filing in September 2015 that he owned 8.8 percent of Dataram’s common stock. He, too, claimed to be a passive investor.

Stetson’s total excluded an unspecified amount of Series A preferred stock, as well as warrants attached to the preferred stock and warrants connected with the notes  the company issued in 2014. Instead of listing how much Series A stock he held, Stetson said only that it was convertible to 100,250 common shares.

Depending on whether that number referred to the original conversion price or the reduced price he would have owned either 20,000 Series A shares or 40,000 shares (we think it was the latter). Based on that range, Stetson ultimately would have received either 165,000 to 330,000 common shares. He also would have received additional shares for his warrants and notes. Stetson did not file an amended Form 13G reporting any acquisitions or disposals in 2016. Nor did he do so in 2017 or any year after that.



By our calculations, more than 20 million Dataram shares changed hands from June 8, 2016 through July 8, 2016. That was the last trading day before the company executed a one-for-three reverse split.

The reverse split had the effect of boosting Dataram’s share price well above the Nasdaq minimum of $1, while also significantly reducing the number of shares outstanding.

Although the greatly increased trading volume prior to that was partly the product of the promotional campaigns, it also reflected the sale of millions of common shares issued through the conversion of the preferred stock.

If Honig and his associates sold three-fourths of the 4.3 million common shares they stood to receive from the conversion of their preferred stock, and if they realized an average split-adjusted price of $1 for those shares, they would have collected a little over $3.2 million.

If Alpha Capital and three other funds that held preferred stock did the same with the 2.9 million common shares they stood to receive, they would have collected nearly $2.2 million.

All told, we think that the holders of the preferred stock, which constituted a losing investment at the start of the year, wound up collecting more than $5 million in proceeds. That total would have included several million dollars in profits.

None of this would have been possible without Dataram’s unusual willingness to improve the conversion terms on the preferred stock without any contractual obligation to do so, and to enter into a merger deal with an obscure company in a different industry.

Dataram executed a second reverse stock split just before it completed its merger with the U.S. Gold. That one-for-four swap reduced the total number of shares held by Dataram investors, leaving them with less than 15 percent of the combined company.



Our investigation found that the year before the Dataram-U.S. Gold deal, one of the Copper King property’s previous owners had sold its 50 percent stake for around $2 million.

That property had two separate owners between 2006 and 2014. Neither spent meaningful sums exploring or developing it; nor did either assign anything but a modest value to it.

It was owned from 2006 to 2012 by a privately held company called Saratoga Gold Exploration Ltd. According to news accounts, it drilled 36 test holes in 2007 and 2008 but did no further work to develop the site.

A publicly traded Canadian company called Strathmore Minerals Corp. acquired Saratoga in 2012, paying with stock in a transaction that valued all of Saratoga’s assets at just over $9 million.

Strathmore was the source of the preliminary economic assessment that Dataram and U.S. Gold used to set the Copper King property’s net present value at $160 million.

Strathmore primarily was a uranium mining company. According to news accounts, its executives were more interested in Saratoga’s uranium prospects than its gold or copper prospects.

Energy Fuels Inc. (NYSE: UUUU), another uranium miner, absorbed Strathmore in 2013 in a deal valued at just over $28 million. It, too, had little interest in developing Copper King.

Energy Fuels spun off Copper King in mid-2014 to focus on its uranium ventures. It contributed the property to a new entity, CK Mining Corp., in return for $1.5 million cash and a 50 percent ownership stake.



Like Copper King, the Keystone prospect that U.S. Gold acquired in 2017 is an asset that has been passed from one company to the next for little consideration. A decade ago, Keystone was controlled by two small companies, Nevada Pacific Gold Corp. and Tone Resources Ltd.

The first was publicly traded on the Vancouver Stock Exchange; the second was privately held. Nevada Pacific and Tone also controlled other gold properties that were adjacent to Keystone and were considered to have brighter prospects.

In 2007, Nevada Pacific and Tone were acquired by a company headed by noted Canadian mining entrepreneur Rob McEwen. That company was called U.S. Gold Corp.

The same year, the original U.S. Gold had this to say about Keystone: “Drilling has encountered no significant gold values in eleven holds in Keystone, but we remain optimistic about the base metal potential.”

In subsequent years, the most positive thing the company said about Keystone was that it had interesting prospects but difficult metallurgical challenges.

In 2012, the original U.S. Gold combined with Minera Andes Inc., and the merged entity was renamed McEwen Mining Inc. (NYSE: MUX). Keystone became even less important to the company, which turned its focus to mining operations in Mexico, and to a different Nevada project called Gold Bar, in the same general vicinity as Keystone.

Over the next few years, McEwen Mining spent little, if any, money exploring Keystone. It abandoned the property entirely in 2015. The mining claims at Keystone apparently were acquired by two people who had been involved with the project in its earlier years. One of them, David C. Mathewson, had been vice president of exploration at Tone Resources, one of the companies that once owned a stake in the Keystone prospect.

He became vice president for exploration at the new U.S. Gold. The company said in the annual financial report it filed last week that it terminated his employment in May.

Our investigation turned up one more connection between the Keystone acquisition and other companies backed by Honig and his associates.

SEC filings show that an Ontario company controlled by McEwen was invited to invest in Majesco through a private placement that accompanied its merger deal with PolarityTE in December 2016.

McEwen got 60,000 of the roughly 760,000 shares shares sold in that placement. He paid $3 a share, or a total of $180,000. The two companies completed their merger in April 2017.

In the first half of 2017, PolarityTE’s stock price reached a high of almost $19. If McEwen was still holding his shares at that point, they would have been worth $1.1 million. In the second half of that year, they climbed even further, topping $32. If McEwen had not sold by that point, his shares would have been worth almost $2 million.

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