TORONTO (miningweekly.com) – In what promises to be an extraordinary David versus Goliath dust-up, Vancouver-based Rye Patch Gold on Tuesday said it had filed a lawsuit against a Coeur d’Alene Mines subsidiary to gain access to claims it argues the biggest US primary silver producer forfeited in Nevada.
The story broke the previous day, when Rye Patch announced it had taken over certain claims Coeur d’Alene failed to pay yearly maintenance fees on, freeing them up.
The Idaho-based miner denied that it had forfeited its claims, and said on Monday it was pursuing legal action against the Vancouver company.
“Rye Patch Gold US has asserted claims for relief for quiet title, trespass, slander of title and injunctive relief,” said the junior, adding that it was also suing Coeur for damages it may suffer.
In its lawsuit, Rye Patch accused Coeur of “claim jumping”, which the McGraw-Hill Science & Technology Dictionary defines as “taking possession of a mining claim by stealth, fraud or force”.
“In a previous case, the US Supreme Court upheld the effect of the federal law and confirmed that failure to comply with the annual maintenance requirements causes an unpatented mining claim to be forfeited and void,” Rye Patch said in a statement.
Coeur said on Monday the disputed claims covered about one-fifth of its Rochester mine property in Nevada. The news knocked just less than 1% of its share price on the TSX, while Rye Patch soared 84%.
TSX-V-listed Rye Patch gave back 2.8% on Tuesday to close at C$0.69 a share.
UBS analyst Chris Lichtenheld said in a note to clients a “worst-case impact” for Coeur translated to a roughly 1.8% reduction to the company’s net asset value.