B.C. appeals Cream Silver decision

The government of British Columbia is appealing the decision of the province’s Supreme Court which ruled late last year that Cream Silver Mines (VSE) is entitled to compensation for the expropriation of claims in Strathcona Park.

The claims adjoined the Myra Falls property owned by Westmin Resources, and were viewed by Cream Silver as being prospective for massive sulphide deposits similar to those currently being mined by Westmin.

Cream Silver’s attempts to drill exploration targets on the claims in early 1988 were thwarted by protesters, many of whom were arrested for trying to stop the drilling.

But the protesters were successful in persuading the government to change the status of the park to class A, where exploration is not allowed, from class B, where exploration was allowed with the permission of the minister of parks. Cream Silver launched legal action for compensation and in November, 1991, the Supreme Court ruled that the Crown had expropriated a chattel interest from the company and that the company is entitled to compensation for its loss.

In his decision, Justice Frank Maczko relied on the authority of both the Supreme Court of Canada and and the British Columbia Court of Appeal, among other authority, in cases involving similar complaints to those made by Cream Silver.

“The Crown permitted and encouraged investment and exploration in mining,” he stated. “The company raised public money, invested it in exploration and found something of value. The Crown has taken that value away and deprived (Cream) of any opportunity to capture a return on its investment.” The date for the government’s appeal has not been set. In the meantime, Cream Silver intends to have a date set aside “as early as possible” in 1992 for the court to determine the amount of compensation.

The Cream Silver case is expected to be watched closely by the mining and investment communities as preservationist groups are also seeking to have the huge Windy Craggy deposit in northwestern British Columbia become part of a wilderness park where mining would not be allowed. If this is the case, owner Geddes Resources (TSE) has stated it would seek compensation for its loss.