An Ontario Court has denied River Gold Mines’ (RIV-T) request to relieve it from forfeiture of a lease to operate the Edwards gold mine northeast of Wawa, Ont.
The decision came a day after mine owner VenCan Gold (VCG-M) formally notified the company of the deal’s termination (T.N.M., Oct. 19-25/98). The court also agreed to VenCan’s decision to pursue legal or arbitral steps to evict River from the mine.
River has been operator of the Edwards mine since March 1996. Under the deal signed at that time, River paid VenCan $500,000 in cash and was to forward it 50% of future operating profits, less that company’s share of “development and mining costs” as defined under the agreement.
The current dispute surfaced last August, when Vencan rejected River’s claim that the mine had incurred a loss of $425,845 loss in 1997. Although both parties agree that Edwards generated $13.3 million in revenue from production of 30,414 oz. gold, VenCan maintains that the mine actually earned $1.4 million in profit that year.
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