Slave battle heads to courts

A dispute between joint-venture partners Ashton Mining of Canada (ACA-T) and Pure Gold Minerals (PUG-T) over the Slave Regional project is headed for the courts.

Ashton filed a statement of defence and counterclaim in British Columbia’s Supreme Court after Pure Gold filed a lawsuit alleging breach of contract against Ashton in late May.

Pure Gold is looking to increase its interests in several properties held under the Slave Regional joint venture, including the Hydra, Perseus and Artemisia claims. Pure Gold also claims the right to an interest in properties Ashton acquired in Nunavut and the Northwest Territories outside of the joint venture during the past three years. These would include the Kikerk Lake project Ashton optioned from Caledonia Minerals, a 6-property claim group optioned from Augusta Resource (YAU-V), and the Thonokied Lake project, optioned from private vendors.

Ashton’s counterclaim asserts Pure Gold has no claim to the properties acquired outside the joint-venture area. Ashton also claims Pure Gold failed to inform it of an opportunity to acquire an interest in the Asiak River, Asiak Lake and North James River properties in Nunavut, and that Pure Gold’s half-interest in the property is in fact held in trust for the Slave joint venture. The suit also seeks damages for Pure Gold’s breach of contract.

In mid-May, Pure Gold announced a deal to earn a half-stake in the North James Bay property in Nunavut’s Coronation Gulf district from Hunter Exploration Group by paying $50,000 in cash and issuing 200,000 shares over two years. The deal also calls for Pure Gold to fund $500,000 worth of exploration over four years.

The claims are subject to a 2% net smelter return royalty on base and precious metal production and a 2% gross overriding royalty on diamond production. An annual advanced royalty payment of $12,500 begins Aug. 30, 2003.

The 403-sq.-km property is 90 km northeast of the Artemisia and Potentilla kimberlite discoveries.

Recently, an 11-tonne mini-bulk sample from Artemisia resulted in an uninspiring 1.176 carats of diamonds larger than 0.8 mm square mesh, for a sample grade of 0.107 carat per tonne, or 10.69 carats per 100 tonnes. No further work is planned on Artemisia.

Artemisia is found on the Kim property, which is part of the Slave Regional joint venture, in which Ashton has an 89.4% interest and Pure Gold the remainder.

Ashton also reported the discovery of another kimberlite body on the Foxtrot property in the Otish Mountains region. The body is the seventh found on the property by Ashton and equal partner Soquem, a Quebec Crown corporation. Dubbed Renard 7, the body lies 1.3 km north of the diamondiferous Renard 2 pipe. A vertical hole, sunk to test a geophysical anomaly, cut kimberlitic rock after passing through 18.5 metres of overburden. The hole was terminated in kimberlite. A second hole is currently being sunk.

Planned too are several holes to test at least two other geophysical targets. The holes are part of a program designed to define the Renard 2, 3 and 4 pipes. The partners intend to collect a 4-tonne, mini-bulk sample from drill holes on each of Renard 3 and 4, and will return to Renard 2 to collect 1 tonne of kimberlite from two planned drill holes. In the winter of 2003, Ashton will drill for a mini-bulk sample from Renard 5, which is beneath a small lake.

So far, Renard 1 through 6 have all returned both macrodiamonds (defined here as exceeding 0.5 mm in at least one dimension) and micros. In July, Renard 3 surrendered eight macros and 11 micros from a 54.6-kg sample. The largest is a 0.13-carat, colourless, whole crystal measuring 4 by 2.7 by 1.9 mm.