Teeshin says Dome Mountain secure

A contract dispute between Teeshin Resources and Canadian United Mine rals will be adjudicated by Vancouver lawyer Leon Getts acting as arbitrator.

The dispute between the two companies is essentially over which one will act as operator of the Dome Mountain gold project near Smithers, B.C. Whether or not each of the parties lived up to its contract obligations will be the subject of the arbitration procedure expected to begin late in the year.

Although the property is the subject of contract wranglings, Teeshin says it has made all property payments and is continuing with development of the project. It says its option to earn a 75% interest in the property, subject to a back-in clause that would cut that interest by half, is secure.

Regardless of the outcome of the arbitration, it seems likely that Total Erickson will gain and exercise the right to back in for a 50% interest in the property leaving Teeshin with 37.5% and Canadian United with 12.5%, says Teeshin President Stafford Kelley.

Teeshin has continued exploration on the project having replaced Canadian-United as operator and will soon start underground exploration of the Boulder Creek zone.

Teeshin is required to spend a total of $2.5 million on the project by Oct 31, 1987, to fully exercise its option. It expects to have reached that point by March, 1987, and says production could begin before the end of 1987.

Drill indicated reserves on the Boulder Creek zone are about 240,000 tons grading 0.458 oz gold and 2.3 oz silver per ton.

Teeshin says an Ontario numbered company was set up in co-operation with Teeshin management to acquire the Noranda interests in the property subject to the consent of Panther Mines and Reako Exploration agreeing to assign the Noranda interest to Teeshin and to provide the necessary financing to put the project into production.

“After these agreements were reached, Total Erickson entered the scene through Panther, Reako and Canadian United,” says Mr Kelley.

Panther and Reako are the original vendors of the property. They gave Noranda the original option and have the right to say whether Noranda passes its back-in rights to the numbered company or Total Erickson. Regardless, the back-in party must pay 80% of the cost of putting the property into production once the production decision has been made.

“Teeshin obviously would prefer the numbered company proposal, but recognizes the operating expertise of Erickson and will welcome either participant,” says Mr Kelley.