FYI: From Sedar Prospectus re: legal proceedings
17. LEGAL PROCEEDINGS
Neither the Issuer nor any of its properties is the subject of any pending legal proceedings
nor are any such proceedings known to be contemplated, save and except as set forth below:
On March 30, 1999, Aber Resources Ltd. (?Aber?) commenced legal proceedings against
the Issuer in the Supreme Court of British Columbia, Vancouver Registry, Action No. C991653,
in relation to its interest in the Camsell Lake Property. The legal proceedings relate to Aber?s
participation in the 1999 Program and Budget for the Camsell Lake Property. The background to
the legal dispute are as follows:
(a) On December 16, 1998, the management committee of the Camsell Lake Joint Venture
adopted a Program and Budget in the amount of $12,425,000 (the ?1999 Budget?).
(b) The Issuer, in its capacity as Operator under the Joint Venture, submitted the 1999 Budget
to Aber on December 18, 1998.
(c) Under the Camsell Lake Joint Venture Agreement, each party is required to elect in
writing to contribute to a budget within 30 days of receipt of the adopted program and
budget. Failure to make such an election is deemed to be an election to not contribute to
the program and budget.
(d) The Issuer elected to contribute to the 1999 Budget but no written election to contribute
was received from Aber in the time set out in the Camsell Lake Joint Venture Agreement.
(e) On March 3, 1999, the Issuer confirmed in writing to Aber that Aber was deemed to have
elected to not contribute to the 1999 Budget.
(f) The Issuer elected to contribute 100% of the 1999 Budget and such expenditures have
now been incurred. As a result, it is the Issuer?s position that the Issuer?s interest in the
Camsell Lake Property has increased from 67.76% to 84.02%.
In its Statement of Claim, Aber claims as follows:
(a) A Declaration that Aber has the right to participate in the 1999 Budget and Exploration
Program for the Camsell Lake Joint Venture, and all necessary or incidental orders and
directions.
(b) In the alternative, an order for relief against forfeiture of Aber?s right to participate in the
1999 Budget and Exploration Program for the Camsell Lake Joint Venture and the
consequences of such forfeiture.
(c) Damages for breach of contract; and, or alternatively, breach of fiduciary duty.
(d) Punitive damages.
(e) Special Costs or alternatively Increased Costs or alternatively ordinary costs.
The Issuer filed its Statement of Defence on April 20, 1999.
As of mid-December 1999, Examinations for Discovery had been conducted and the
transcripts thereof were being reviewed. |
