Settlement rejection stymies Canadian gold/copper project exploration
8th May 2012
RAYMOND, Alberta, May 8 – The battle over ownership of the prospective Treaty Creek gold/copper project in British Columbia, Canada, looks headed for the courts.
A settlement offer by 51% aspirant, American Creek Resources, has been rejected by fellow Canadian company Teuton Resources Corp.
Teuton’s rejection of the deal is sure to cost the project, that sits along trend from one of the world’s largest gold/copper deposits held by Seabridge Gold and Pretium Resources, its third summer exploration season.
American Creek believes prime target, Copper Belle, would produce a resource quickly if it were to conduct step out drilling around the discovery hole.
The argument is over expenditure for equity arrangements.
Back in September 2009, American Creek says it advised Teuton it had completed its initial earn-in by spending over $C5M on Treaty Creek and sought title transfer title according to the terms of the earn-in agreement. In December 2009, the company provided copies of expenditure invoices totalling about $6.2M. While transfer was refused, American Creek says Teuton refused to say what expenditures, if any, were disagreed with.
“As a result, we lost the 2010 and 2011 exploration seasons. It would be tragic to lose a third season and miss the opportunity to develop what is likely a world-class property,” American Creek CEO Allan Burton says in the company’s settlement offer letter.
In an effort to bring this matter to a conclusion, the company says it again recently reviewed its exploration expenditure, which came out nearly $90,000 above the previous expenditure at $6,573,357.48.
“We are confident these expenditures can be proven in court,” Burton said. “We are confident we will win the lawsuit and will be awarded title, damages and costs, which could be substantial.
“In the event Teuton is unable to pay any judgment awarded to American Creek, Teuton’s assets, including its 49% interest in Treaty Creek, could be sold to satisfy the judgment. By proceeding with the lawsuit Teuton is, therefore, risking its 49% interest in Treaty Creek.”
The multi-option settlement offer included the joint retention of independent auditors to determine the exploration spend for equity issue. Another option was for the joint retention of a major legal firm to prepare a JV agreement including American Creek’s 51%, Teuton’s 49%, but with American Creek waiving its right to earn an additional 9%. Another option involved the appointment of one of Vancouver’s leading geological consulting firms as project operator.
American Creek’s concessions included giving up its right to act as project operator, giving up its right to legal title 100% of the project (with Teuton’s 49% beneficial interest held in trust), giving up its right to earn an additional 9% in the property and waiving any right to damages.
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