Montreal-based St. Genevieve Resources (TSE) appears to have won the first round in its legal fight with Aur Resources (TSE) for control of about 8.4 million shares of Societe Miniere Louvem (TSE).
A Quebec Superior Court has ruled that Aur did not have the right to seize the Louvem shares in late August after an attempt by Aur to purchase control of Louvem fell through.
In addition to the Louvem shares that St. Genevieve agreed to sell to Aur and about four million shares and warrants, the proposed agreement would also have given Aur control of the Chimo gold mine, east of Val d’Or, Que.
According to the court ruling, the seizure order was improper because Aur did not obtain proprietary rights or become owner of the Louvem shares before the proposed sale was voted down by the board of St. Genevieve.
The ruling was handed down during the discovery stage of a legal dispute involving Aur and Louvem over who should own and operate the Louvicourt Twp. massive sulphide discovery near Val d’Or. The dispute is scheduled to be heard in a Montreal court later this year.
While Aur says it will appeal the court decision, news that the seizure order had been quashed drove the price of St. Genevieve shares up 11 cents on a volume of more than 760,000 shares. Immediately after the announcement, shares of Aur and Louvem remained relatively steady, closing at $14.25 and $9.25 respectively. The ruling has implications for Noranda Minerals, a unit of Noranda Inc. (TSE), which has a right of first refusal on the Louvem shares as part of its option to purchase control of the Val d’Or company. Noranda currently holds about 14% of Louvem while Teck (TSE) and Cominco (TSE) have increased their combined interest in Aur to 21%.
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