As names go, Berezovsky is commonplace in Russia, though not as common in Russia as Brown is in the US or UK.

As goldminers go, Berezovskoye is minuscule, and for all of its short recorded history 2,000 kilometres northeast of Moscow, it has been a prospector, not a mine producer. That’s an honourable occupation, and one which, with the fortitude, patience and luck which distinguish the real mineral prospectors from the rest, can turn out to be very fortunate. The share markets are a different kind of territory – one which can reward impatience, as well as fool’s gold, if not the real thing.

So when a publicly listed North American company called Advanced Gold Technology (AGT) recently claimed to own 49% of the Berezovskoye mining company, and told investors through an associated US company called Triton, that the pay dirt it was about to hit was worth more $570 million, there was an understandable flutter of investor interest.

Located in the Khanty-Mansiisk autonomous district, with mineral prospecting licences for areas in the Berezovsky district and others, OAO REP (Exploration and Operating Enterprise) Berezovskoye is run by Mukhamed Zhilov, and a supervisory board of six people who include a relative, Valery Zhilov (right). The latter can be found in media and internet archives where he has reportedly been engaged in the pharmaceutical trade with patents whose ownership has been disputed, along with their medical benefits. A Moscow court case in which Zhilov’s claim against a reporter was dismissed also confirms the controversial record.

According to the Russian mining company records, the Berezovskoye company is owned by a Cyprus-registered company called Alkiminis Investments Limited. This is believed to be controlled by the Zhilovs, but that cannot be corroborated.

The last financial report for Berezovskoye was for 2009. This reported prospecting under way for iron-ore at Mankhambovsky and Nakhorsky, and for copper at Aksysinsky. Total costs reported for that year that year came to almost Rb100 million ($3 million). In 2010, the company documents claim it was planning to spend Rb171.5 million ($5.7 million). Included as new prospecting targets were Leplinsky (copper), Telaizsky (gold), Khalmeryinsky (gold), and some other gold prospects. Revenues for 2009 came to Rb89 million ($2.8 million); net profit to Rb693,000($21,847).

So imagine everyone’s surprise when this appeared on North American investment market websites in the middle of last month: “Triton’s (PINKSHEETS: TTDZ | PowerRating) management is pleased to announce today that it received on behalf of Advanced Gold Technology (“AGT”) a Technical Study of Mineral Resources and reserves of gold deposits in three major mines owned and operated by AGT’s sister company Berezovskoye in Russia. The study was conducted by the very reputable and respectable Consulting Company SRK Consulting Ltd of Cardiff, UK.

It is estimated that the “Pine” mine can produce 50,144 ounces in gold that is valued at $70,201,600 on the International gold market. It is also estimated that the “Talaiz” mine can produce 85,808 ounces in gold valued at $120,131,200 on the International gold market and that the “Vorgavozh” mine can produce an estimated 272,832 ounces of gold valued at $381,964,800 on the International gold market. The opinions that are expressed in the study indicate that according to the research that was conducted on site, it is estimated that in total all three mines can produce 408,784 ounces valued at a total price of $572,297,600 on the International gold market.”

There are multiple mining companies with the name Triton. This one is called Triton Distribution Systems and also Triton Management in press releases it posts through the media of the US Over-the-Counter (OTC) market . With a ticker of TTDZ, Triton’s share is currently priced at less than one US cent. It reports its principal lines of business as computer software and networks.

On January 14, Triton announced it was acquiring 51% of Advanced Gold Technology (AGT) with an exchange of shares. Triton then announced that AGT’s principal asset value came from the gold buried in Russia and owned by AGT’s “sister company Berezovskoye”.

On January 18, here’s what Triton had to say again: “Triton’s (PINKSHEETS: TTDZ) management is pleased to announce the highly anticipated purchase of 51% of the outstanding equity of Advanced Gold Technology (“AGT”). On Friday January 14, 2011, Triton, AGT and Universal Holdings executed final purchase agreements and exchanged instructions for issuance of stock certificates to each company. “We are very excited to be in this partnership with Triton and Universal. We have planned a very ambitious and achievable business plan that we feel we can be successful executing, now that we have the management and guidance of Triton and the backing of Universal,” said Edward Rubenstein, AGT’s Chief Executive Officer. “ Elsewhere in Triton’s postings, it claimed Universal Holdings was from “Beijing, China [and] will provide any necessary capital to Triton Distribution Systems, Inc. to expand its operation and to complete the AGT acquisition.”

The Chinese may have been providing the cash for Triton, but the capital value was pure Russian, according to the published claims. “In addition to the expertise in the mining industry,” said Triton’s takeover announcement, “AGT brings sizable relationships in equipment manufacturing for mining and established functioning producing mines in the Russian Federation. AGT’s contract with “ITOMAK” from Novosibirsk, Russia, allows AGT the opportunity to establish exclusive manufacturing of mining equipment in the United States for International sales all over the world. “For the first time ever this technology will be available for manufacturing in the United States,” said Gregory Yudashkin, Chief Engineer and President of AGT USA.”

“Based on the 51% equity purchase of AGT, Triton is preparing to file initially the end of the year 2010 financial reports as well as work to upgrade the company to the OTC Bulletin Board and file the adjusted financial reports that will specify the AGT ownership and the preceding ownership of AGT in OJSC Berezovskoe mines in Russia. It is estimated that in the next 5 years the 3 mines owned by Berezovskoe can produce 408,784 ounces of gold valued at a total price of $572,297,600 on the International gold market. Of that amount $280,425,824 will be credited to AGT and further $143,017,170 will be credited to Triton and be recorded on its balance sheet.”

The problem with these claims is that they appear to be even more difficult to run to earth than Berezovskoye has managed to get its hands on real gold underground.

Back in 2007, Berezovskoye claimed it held 10 tonnes (321,500 ounces) of gold reserves and was planning to find and confirm another 20 tonnes (643,000 oz). This was publicized during a visit to one of the company’s prospects in the Berezovsky district by the regional governor. Gold production was reported at the time to be just 250 kilograms (8,038 oz). The Russian press reports have suggested that Berezovskoye’s prospecting licences had originally been held by the Khantiy-Mansiisk government, and were sold off to a company which included ex-regional officeholders as beneficiaries. Apparently, this then turned into Berezovskoye.

Since the January announcements by Triton, an investigation of the published claims has been pursued with each of the named Russian and American companies, their identified spokesmen or chief executives, along with the Russian mine licence regulators and the Khannty-Mansiisk government. Not one has responded.

ITOMAK was asked whether, as published, it cooperates with AGT, supplies or markets its equipment through AGT, or invests in Berezovskoye? No reply

Nikolai Boltenkov of Yugra-Nedra, the Khanty-Mansiisk branch of the federal mine licensing agency Rosnedra, to confirm the licence particulars and licence compliance for Berezovskoye; and to report what legal connexions have been registered with the regional and federal authorities, as required by Russian mining and investment law, between Berezovskoye and the foreign companies, Alkminis, AGT and Triton. Boltenkov’s secretary has responded that he is working on his answer, but none has been received.

Anatoly Protasov, deputy head in the regional Rosnedra branch responsible for Khantiy-Mansiisk, was asked the same questions. He ignored them.

Meantime, in the US, AGT posted this announcement on February 10, quietly changing its earlier claims about the riches of Berezovskoye:

Before

“AGT is currently a profitable mining services company, offering a full suite of mining services including: Contract Mining, Contracting / Construction, and Fabrication and Machine Services. AGT estimates total earnings for calendar year 2010 to reach $35 million in revenue and $15 million operating income. Additionally the company owns 49% of REP BEREZOVSKOYE, a well established Russian mining company located in the north of Russia. AGT estimates [Berezovskoye] revenues to reach $55 million in 2011 with $20 million in operating income.”

After

“AGT is currently a profitable mining services company, offering a full suite of mining services including: Contract Mining, Contracting / Construction, and Fabrication and Machine Services. In addition to the expertise in the mining industry, AGT brings sizable relationships in equipment manufacturing for mining and established functioning producing mines in the Russian Federation. AGT’s contract with ITOMAK from Novosibirsk, Russia, allows AGT the opportunity to establish exclusive manufacturing of mining equipment in the United States for International sales all over the world. For the first time ever this technology will be available for manufacturing in the United States. AGT specialists in manufacturing, trades and sales of centrifugal concentrators and magnetic separator by ITOMAK.”

In the same posting, AGT said it was cancelling the merger deal with Triton. AGT claimed “we are breaking our association with Triton Distribution Systems, Inc before the deal closed, because of the breach of contract on their part and inability of Triton Management to finance AGT project. Additionally we could not confirm the legitimacy of Universal Holding of Bejing to finance this deal.”

This came after a week of postings by Triton complaining “there have been misrepresentations as far as a signed contract with Advanced Gold Technology (“AGT”), dated January 14, 2011. Triton’s management has decided to post publicly the original contact between Triton Distribution Systems, Inc. (“Triton”) and Advanced Gold Technology, Inc. (“AGT”). Furthermore Triton’s management is not sure why such fabrications are circulating on the Internet and who is responsible for spreading in such an unprofessional manner false information. Triton’s management vows to make public and divulge immediately thereafter all the contacts, commitments, financial statements and all information pertaining to the business dealings with AGT and its officers, via a series of press releases.

Emails circulating on US investor networks, apparently from AGT’s chief executive, tried pinning the blame for the collapse of both the merger and the Russian gold claims on Triton, but noone from either company wants to speak on the record.

SRK officials at the company’s headquarters in Cardiff, and in the Moscow, were asked to say if the company has done verification or valuation work for Berezovskoye, and examined its gold reserves. They did not respond by publication deadline.