JOHANNESBURG (miningweekly.com) – The Quebec Superior Court has rejected TSX-V-listed Clifton Star Resources' request to suspend its obligations under an option agreement for the Duparquet project, in Quebec's Abitibi region.
This emerged a month after Clifton filed for a safeguard order, as litigation between some of the option owners had hindered efforts to finance the next option payment as part of a deal to buy out the remaining shares Clifton did not already own in the project.
Clifton was required to make staggered option payments totalling $52.2-million by 2017 to acquire the remaining 90% interest in the Duparquet project, which comprised the Beattie, Donchester and Dumico properties.
The next payment of $10-million was due on December 1.
In June, Clifton was served with proceedings, as an impleaded party – some of the option owners of the Duparquet project – instituted legal action against other option owners, on grounds of oppression based on alleged improper transfers of mining titles that would have occurred over 20 years ago.
By August, the plaintiffs amended their action to include Clifton as co-defendants, asking the Court to “condemn the company jointly and solidarily” with the co-defendants to reimburse any and all amounts unjustly withdrawn or withheld from Beattie Gold Mines and/or Border Chemical Company.
“The company strongly believes that the amended proceedings against it have been instituted as a means of exercising pressure on the co-defendants and that there is no basis in fact or in law for this recourse against the company,” Clifton said at the time.
The safeguard order intended to preserve its rights under the option agreements pending the outcome of the litigation.
“Clifton Star has tried without success for the last year to renegotiate the terms of the option agreements with the owners, in order to reflect the decline of the gold price and of the difficult mining financial markets,” the company said in a statement.
Now, the company aimed to “deploy its best efforts” to maintain its option to acquire the remaining 90% in the Duparquet property and planned to re-evaluate its legal and financial investment in the project on December 1 to reflect the value of its interest in the project.
“There can be no guarantee that Clifton will be successful in its efforts to maintain its option to acquire the additional 90% of the Duparquet property,” Clifton concluded.