Gold Bar shareholder suing Leliever over gold bet deal

A Gold Bar Resources (COATS) shareholder, who says he owns a 51% interest in the company, has initiated legal proceedings to prevent Gold Bar from selling part of its interest in a Gogama, Ont., gold property to Southern Arizona Mining and Smelting (COATS). James Hunter of Toronto says he is asking the Supreme Court of Ontario for an interlocutory injunction to prohibit Gold Bar from dealing its properties or issuing shares. Also named in the lawsuit is Gordon Leliever, president of both Gold Bar and Southern Arizona Mining.

Hunter’s lawyer Alan Aucoin says the lawsuit centres on a proposed agreement which gives Southern Arizona the option to earn a 50% stake in the Chester Twp. gold property.

Aucoin says the agreement is illegal because Vancouver-based Siscoe Callahan Mining (VSE) has already signed a letter of intent to finance the property to production in return for a 50% interest.

“We are simply seeking specific performance of that letter,” said Siscoe President Bill Doig. He claims he was prevented from obtaining a formal agreement due to alleged difficulties in getting information on the property.

Based on 90,000 ft. of drilling in 200 holes, preliminary reserve estimates at Chester Twp. stand at 426,000 tons of grade 0.29 oz. gold per ton. Those reserves exist to a depth of 600 ft., according to Leliever.

In May, Southern Arizona said it had signed an agreement giving the right to earn a 50% stake in the Chester Twp. claims by spending $6 million on exploration and development over three years.

The deal makes Southern Arizona project operator while Gold Bar and its largest shareholder, Canadian Gold Resources (COATS), would end up with 39% and 11% of the property respectively.

“Everything has been done according to the book,” said Leliever, who is a controlling shareholder of Southern Arizona. “They (Siscoe) were supposed to come up with a formal agreement which was never produced,” he said. In response to the lawsuit, Leliever has filed a statement of defense with the Supreme Court.

Hunter says he intends to requisition a meeting of Gold Bar shareholders in a bid to remove the incumbent directors and elect a new board.