Wednesday, July 9, 2008

Xstrata named in lawsuit - Times Exclusive

By LEN GILLIS ~ The Timmins Times
The Timmins Times has learned that Xstrata Copper Canada is the target of a $3 million lawsuit by Opawica Explorations of Vancouver over the access to mining lands near the Kidd mine in Timmins.
Opawica says “it has commenced an action in the Ontario Superior Court of Justice against Xstrata Copper Canada” so that Opawica can carry on with drilling a parcel of land outlined in a joint venture between Opawica and Xstrata’s predecessor, Falconbridge Limited. Opawica president Dan Clark told The Timmins Times this week that his company had rights to drill as parcel of land about two kilometres northwest of the Kidd mine.
“There are a few remaining drill targets we would like to drill before the closure of the Kidd Creek Mine,” said Clark.
“Basically we had proposed a ten-hole in-fill drill program under our joint venture agreement,” he said.
“We had stopped drilling there in 2003 looking for deep ore zones and we felt we had probably exhausted some of the larger target areas where you might find three to eight million tonne or greater ore zone.”
However, he believes there is still a worthwhile zinc, silver and lead deposit that hasn’t been fully explored. Clark says Xstrata has taken the position that the deposit is not worth the effort and is denying his company access to that land.
“I’ve been in this business 25 years and I’ve never seen such a position taken, by a junior company let alone a major mining company,” Clark said.
“They’ve told us you can’t access the land. You cannot drill. We will not provide you the database. We will never allow you access to that property. We have environmental concerns on the property. We have safety concerns,” Clark said.
“We asked ‘can you please advise us what they are. No we will not be talking to you anymore. Have a nice life!” Clark went on.
The Times asked Clark if he felt the concerns raised by Xstrata about environmental and safety were valid concerns.
“No. Absolutely not. We think that’s a purposeful misrepresentation by Xstrata. That’s our opinion.
“I’ve never seen such a position taken by a corporation. Especially one that has just come into Canada,” Clark continued.
“I mean I’m a longtime Canadian kinda guy you know. I love commerce. I love international commerce, but this entity Xstrata is owned by Swiss bankers and I don’t know what their mandate is, but it certainly isn’t to engender positive relationships as their annual report says, let me tell you that.”
Clark says the lawsuit was a last resort because he fully expected to work out an arrangement to access the property.
“There are areas where we can access the property by road, where we do not have to pass through the footprint of the mine, but once again they have told us they will not allow any access, they will not allow any exploration to be conducted,” he said, adding that Xstrata has indicated it is not interested in pursuing more work.
“They’re standing very firm that they don’t believe the orebody is economic, nor do they think there’s anymore drill targets. Clearly that’s not the case,” Clark said.
“We’ve commenced an action. We now have to make a case for damages,” Clark told The Times.
“We’re looking for $1 million in punitive damages. And we want $2.2 million in recovery of the monies we’ve spent on the property to date if access is actually denied.
So we’re looking for 3.2 million,” he said.
Emily Russell, a communications official with Xstrata Copper’s corporate office has confirmed the company was notified of the lawsuit and says Xstrata intends to defend itself. No other comment was offered.

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