Ontario court awards damages to Kinbauri

The Ontario Superior Court of Justice has awarded junior explorer Kinbauri Gold (YKB-V) compensatory damages of $1.7 million plus prejudgment interest and costs, in relation to a failed 1990 merger agreement between it and the privately owned predecessor to Iamgold (IMG-T).

Kinbauri had claimed compensatory damages of just under $8.2 million, plus $416,000 for costs and expenses. A further claim of $2 million worth of punitive damages was dismissed by the court.

In 1999, a trial court decided that Iamgold’s 1991 refusal to complete the merger was in breach of the merger agreement. The Ontario Court of Appeal sustained the trial verdict, and the Supreme Court of Canada refused to hear Iamgold’s subsequent appeal.

“This has been a long and difficult process for the company and our shareholders,” says Iamgold’s vice-president and general counsel, Larry Phillips. “Although the damage award is a significant amount, it is far less than the amounts claimed by Kinbauri throughout the hearing on damages. We will be reviewing the reasons for judgment with our litigation counsel in order to determine the necessary steps to conclude this matter.”