Tuesday, November 23, 1999
Long-running battle for Kassandra mine in court again today $248M Greek mine: Insolvent company Anvil Range sues for a stake in project
Keith Damsell Financial Post
Refusing to rest in the corporate graveyard, Anvil Range Mining Corp. is taking its fight for a piece of a $12-billion Greek mineral discovery to an Ontario Court today. The insolvent Toronto-based metals company claims it is entitled to a 24% interest in the troubled Kassandra project, a mixed metals deposit north of Athens. TVX Gold Inc. of Toronto has rights to 76% of the deposit and has spent the past four years struggling to develop the proposed $248-million project. (All figures are in U.S. dollars.) The mining project has sparked fierce opposition from environmentalists. Two years ago, protesters fired rifles over buildings and set fire to drilling operations. The latest chapter in the long battle for Kassandra pits Adrian White and Robert Granger, former Anvil Range executives, against 1235866 Ontario Inc., a numbered company owned by the creditors of bankrupt Curragh Inc. Both sides claim the right to sue for a stake in Kassandra.
"The asset is a lawsuit," said one legal observer close to the case. "You've got a bunch of vultures circling around this project." The complex Kassandra story began in July, 1991, when geologist Hendrik Visagie and metals trader David Lean visited the site of behalf of Toronto-based Curragh. They recommended the zinc, lead and coal company make an offer to purchase the mineral-rich property. Curragh said no. In May, 1992, the Westray mine explosion in Nova Scotia killed 26 coal miners and destroyed Curragh. In April, 1993, the company filed for protection from creditors and over the next year, court-appointed receiver KPMG Inc. put Curragh's assets on the auction block. The numbered company acquired four European subsidiaries, while Anvil Range snapped up the Faro lead-zinc mine in the central Yukon. Meanwhile, Mr. Visagie and Mr. Lean took on a third partner, James Stephenson, and formed Alpha Group. They began shopping around Kassandra and in late 1993, signed a partnership to bid for and develop the property with TVX. The relationship quickly soured and TVX opted to go it alone. For $46-million, the aggressive gold company won the right to develop Kassandra in March, 1995. Incensed, Alpha Group sued and 13 months ago, was awarded rights to a 24% interest in the project. TVX is appealing the decision. The legal victory captured the interest of Curragh's successors. In July, 1235866 Ontario filed a lawsuit alleging Mr. Visagie and Mr. Lean had benefited from Curragh's knowledge of Kassandra. The firm, whose owners include the Yukon and federal governments, is after Alpha Group's 24% stake plus $5-million in damages.
Not to be outdone, Mr. White and Mr. Granger began lobbying on behalf of Anvil Range. In a series of letters, the former executives allege the Faro acquisition comprised all of Curragh's base metal assets, including Kassandra. Low metal prices pushed Anvil Range into receivership in April, 1998. Deloitte & Touche LLP, Anvil Range's receiver, is pursuing the claim against the Alpha Group. Curragh receiver KPMG takes a very different view, alleging Mr. White and Mr. Granger are making "inaccurate and misleading statements" regarding the Curragh auction four years ago. "The only assets being sold to Anvil were those directly related to the future operation of the ... Faro property," said KPMG in a Nov. 18 report to the court. Justice James Farley will hear the dispute in Ontario's Superior Court of Justice this morning. |
