Stockprowler.com

A very interesting news week for Echo Bay Mines, Ltd. and our last Stockprowler pick, ECO.WS (Echo Bay Mines, Ltd. warrants)… On Monday, June 10, Canadian gold producers Kinross Gold Corp. (KGC), Echo Bay Mines Ltd. (ECO) and TVX Gold Inc. (TVX) announced an agreement to combine in a three-way transaction valued at about $865 million. The merger structured with Toronto-based Kinross Gold as the acquiring concern, is expected to create the world's seventh-largest gold producer. The combined companies will produce about two million ounces of gold per year, and have "strong upside" to any further increases in the price of gold, said Kinross Chairman and Chief Executive Robert Buchan. "The new Kinross will have a strong group of exploration and development projects for internal growth and an elevated platform to aggressively pursue appropriate external growth opportunities."

Unfortunately, the announcement of the deal came on a day when gold prices continued their retreat from recent highs. The combined firm will operate or have interests in 12 gold mines, and 65% of its production will be in the U.S. and Canada . The transaction requires the approval of two-thirds of the shareholders of both Echo Bay and TVX, and a majority of Kinross shareholders. According to the 8-K filing holders of common shares of TVX receive 0.65 common shares of Kinross for each common share of TVX and the holders of common shares of Echo Bay receive 0.52 common shares of Kinross for each common share of Echo Bay. As for the ECO warrants, it has been reported that each ECO.WS buys 0.52 KGC with the same strike price as before ($0.90 U.S.) and the same expiration date, November 14, 2003.

On June 11, Fidelity Management & Research Company and Fidelity Management Trust Company of Boston announced an additional purchase of 3,180,400 shares of Kinross Gold Corp.'s outstanding common stock. As a result of the purchase, Fidelity holds 36,576,300 shares (or 10.21%) of Kinross Gold Corp.'s outstanding common stock… a very bullish development in our view. As we stated in our last report, keep your eye on the U.S. Dollar Index http://futures.tradingcharts.com/chart/US/62… if it heads south of 108, these warrants could produce astronomical returns to the speculative investor.

Stockprowler’s pick this week...

Carnegie International Corp. (OTC Pink Sheets: CGYC)
11350 McCormick Rd.
Executive Plaza 3, Suite 1001
Hunt Valley, MD 21031
Phone: 410-785-7400
Corporate Web Site: http://www.carnegieint.com
Shares Outstanding: 84 million (last SEC 10QSB)
Market Capitalization: $2.9 million
Closing Price Friday: 3.5 cents

A federal jury on Saturday found accounting firm Arthur Andersen guilty of obstructing justice. The Chicago based auditing firm admitted destroying thousands of Enron records… Will accounting giant Grant Thornton, LLP be next? Grant Thornton, LLP, one of the largest accounting firms in the country with more than 620 offices in 106 countries, has been hit with a whopping $2.1 billion lawsuit. . The suit filed by Carnegie International Corp. alleges fraud, negligence, intentional interference with business relations, fee gouging, breach of contract, and defamation. The suit alleges that Grant Thornton solicited Carnegie to engage Grant Thornton, LLP to provide auditing and accounting services to its corporation, only to later negligently perform the work for which it is noted. The suit further alleges that:

· Grant Thornton violated Federal securities laws while serving as Carnegie’s independent auditor.

· The company’s financial statements for fiscal years 1997 and 1998, prepared by Grant Thornton and which received unqualified opinions from Grant Thornton, were not in compliance with Generally Accepted Accounting Principles

· Grant Thornton’s negligence caused the halt of trading and ultimately the de-listing of Carnegie’s stock from the prestigious American Stock Exchange.

· Because of Grant Thornton’s fraud and negligence, Carnegie’s market capitalization tumbled, which impacted shareholder value and also prevented the company from undertaking market rate financings and expansion-minded acquisitions.

· As a result of Grant Thornton’s negligent, fraudulent and malicious conduct, Carnegie Chairman E. David Gable and President Lowell Farkas suffered irreparable harm to their reputations.

The suit was filed in the Circuit Court for Baltimore City by high profile trial attorneys, William H. Murphy Jr. of Baltimore, and Willie E. Gary of Stuart, Florida. William Murphy, a former Baltimore City Circuit Court Judge, recently won the exoneration of Don King and Don King Productions from federal insurance fraud charges, and was a member of the legal team that recently won a $185 million dollar settlement in a lawsuit for negligence and malpractice against the accounting giant Ernst & Young, LLP. Willie Gary is well known for the $500 million dollar verdict he won in Jackson, Mississippi, against a Canadian funeral home chain, and for numerous other multimillion dollar verdicts and settlements. The Mississippi verdict remains one of the largest cash awards in U.S. history.

In a motion filed by Carnegie, the company alleges that J.W. Mike Starr, a senior partner and former director of risk management at Grant Thornton, “willfully, knowingly and intentionally destroyed Carnegie documents with the full understanding that litigation was imminent.” The motion says Starr admitted destroying the documents in a deposition given earlier in July 2001 in Chicago, and that “Starr admitted that he deliberately destroyed the entire Carnegie file, including, among other things, e-mails, communications with Carnegie, and his contemporaneous notes of telephone calls, meetings with Carnegie management and the members of its Audit Committee.”

The trial, which began last November, was suspended four days later pending the outcome of a court-ordered investigation of a discovery violation by Grant Thornton. Grant Thornton's counsel had admitted in open court that a second set of “original work papers had been discovered” and further admitted not producing these files during the discovery process, prompting Judge Kaye A. Allison to suspend the trial and appoint a Special Master to investigate and report back. Upon receipt of that report, the Court will determine the course of further proceedings, including acting on Carnegie's motion for default judgment on all counts.

A two-day hearing before the Special Master Juliet A. Eurich, Esq., a former federal prosecutor, was completed on May 31. Carnegie said the hearing focused on the creation and existence of a second set of work papers by Grant Thornton, the late production of the second set of work papers by Grant Thornton, and the more than 150 material differences between those sets of work papers. E. David Gable, Carnegie's chairman, said he was “extremely pleased with the results of the hearing and delighted that this process is finally coming to an end.” Gable said there will be no additional evidence collected in this matter, and that Special Master Juliet A. Eurich, Esq., indicated that her report will be filed with the Circuit Court for Baltimore City later this month.

In another matter, Carnegie President Lowell Farkas said that all field work for the 10-K and 10-Q financial filings have been completed. Farkas said subsequent filings with the SEC should take place shortly, and that Carnegie expects its shares will then return (from the OTC Pink Sheets) to the Over The Counter Bulletin Board at that time. Carnegie International is a holding company for its wholly owned subsidiaries specializing primarily in telephony, telecommunications and Internet products and services. Carnegie’s telecommunications business includes the development of interactive voice response and voice recognition software, the provision of technical support beta testing and Internet support for telephone related computer services and the sale, installation and servicing of telephone equipment.

Trading around 3 cents a share, Carnegie International Corp. (CGYC) is a pure speculation play. Should Carnegie be successful in collecting the $2.1 billion, or even a good chunk of it in a settlement, the stock price will skyrocket. It’s high risk, but a ten- bagger here is a strong possibility. Stockprowler.com readers are encouraged to visit the Carnegie International web site for further information. Stockprowler.com did not receive compensation of any kind from the company or third parties for writing this report. Readers are urged to read the company SEC filings and do their own due diligence before investing in this or any other stock.

Good Trading... Stockprowler