Shares in Aquiline Resources (AQI-V) shot up as much as 32, or 20%, to $1.88 in early trading in Toronto on Sept. 30, after IMA Exploration (IMR-V, IMR-X) sweetened its bid to settle a legal dispute over the Navidad silver-lead property in Chubut province, Argentina.
IMA is offering Aquiline $1 million in cash accompanied by 3.5 million shares and an equal number of share purchase warrants. The notes would be distributed directly to Aquiline shareholders, with the 5-year warrants exercisable at $4 per share.
The offer expires on October 5.
While IMA’s board of directors says it has been advised that it has a “high probability” of winning the legal battle, it is making the offer to avoid the risks of litigation, significant legal costs, and impact of litigation on the company’s development of Navidad.
“A quick resolution of this litigation is in the best interests of the shareholders of both companies as it will rapidly unlock the true value of IMA and its Navidad project,” said IMA in a prepared statement.”
Earlier this year, IMA offered Aquiline $100,000 for the “nuisance value” of the lawsuit filed in British Columbia. The offer was quickly shot down.
In its suit, Aquiline contends that IMA used confidential regional exploration data supplied by Newmont Mining (NEM-N, NMC-T), the former owner of the Calcatreu property. Newmont acquired Calcatreu through its takeover of Normandy Mining.
IMA is alleged to have used that regional information to stake a 100-sq.-km area surrounding what became the Navidad Hill discovery, some 40 km away, shortly thereafter. IMA ended up not pursuing the Calcatreu project, which Aquiline then purchased from Newmont in early 2003.
The trial is slated to begin on October 11.
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