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Gold/Mining/Energy : Regal GOldfields (REGL -- Cdn over the counter)

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To: Brian Warner who wrote (332)3/13/1998 12:39:00 AM
From: Brian Warner  Read Replies (1) of 370
 
herald.ns.ca

Regal pleads case in court

Premier unfairly targeted company: lawyer

By DEAN JOBB / Staff Reporter

The Nova Scotia government singled out Regal Goldfields Ltd. when it blocked mineral
exploration on Jim Campbells Barren, the firm's lawyer claimed Wednesday.

In a Supreme Court hearing in Halifax, Stewart McInnes attacked Premier Russell MacLellan's
decision last fall to return the area of northern Cape Breton to protected status.

"It's discriminatory and it reeks of bad faith," he argued, accusing the premier of "usurping"
powers granted by law to the minister of natural resources.

Regal wants Justice Gerald Moir to overturn ministerial orders barring access to the barren and
imposing a moratorium on mineral exploration.

The hearing will be completed today but the judge has not indicated when he will make a ruling.

The legal action is the latest chapter in a seesaw battle between mining promoters and
environmentalists over 1,700 hectares of bog and barren just outside Cape Breton Highlands
National Park.

A 1993 moratorium on mining was rescinded by the John Savage government in November 1996
after intense lobbying from business interests in nearby Cheticamp.

Mr. MacLellan reversed the decision last Oct. 29, fulfilling a promise made during his campaign
for the Liberal leadership.

While Mr. McInnes characterized the reversal as the act of a government "under siege," it didn't
offend Justice Moir's view of politics.

"The government has to listen to the public, doesn't it?" the judge asked.

Justice Department lawyer Reinhold Endres said the premier was casting himself "in a good light"
when he took credit for the decision to protect the barren. Mr. MacLellan was "reiterating" the
unanimous decision of a task force of three ministers, which included Natural Resources Minister
Ken MacAskill.

Outside court, a spokesman for a coalition formed to protect the barren took exception to Mr.
McInnes's comments about "great debate" and input from "both sides" before the Savage
government's decision.

Ray Plourde of the Nova Scotia Salmon Association reminded reporters that "there was no public
consultation regarding the delisting of the barren. It was done in secret."

Mr. McInnes also claimed the future of Nova Scotia's mining industry is riding on the case.
Companies need to be sure of their rights before investing in exploration and mine development,
he said.

"If the government position is correct, you might as well shut the industry down."

The RCMP is probing allegations that cabinet's 1996 decision to delist the barren was leaked
before it was made public. The Ontario Securities Commission is reviewing possible insider
trading in Regal shares at that time.

Regal has demanded unspecified compensation for loss of the barren, which has two promising
targets for drilling. That issue will be dealt with separately.

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