Ownership of a portion of the SB gold property near Stewart, B.C., is being challenged by Silver Butte Resources (VSE) in a lawsuit filed in the Supreme Court of British Columbia against Esso Resources Canada, Tenajon Resources (VSE) and Westmin Resources (TSE).
Silver Butte alleges that certain claims making up the SB property were improperly assigned by Esso and Tenajon, and that an option agreement was otherwise breached.
The company referred to a 1980 option agreement and a subsequent agreement which granted Esso the right to earn a 60% interest in the claims. By 1983, Silver Butte elected to convert its interest into a 20% carried interest rather than form a joint venture with Esso.
Silver Butte alleges that Esso entered into various agreements with Tenajon, and then in 1989, transferred its interest in the option agreement and the claims to Tenajon, “without advising or consulting with the company.” Tenajon subsequently entered into a joint venture with Westmin to place the SB property into production. The deposit is currently being mined and trucked for processing at Westmin’s Premier Gold mill near Stewart.
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