Catear forfeits Goldwedge for failure to pay $45 fee

An unpaid $45 annual rental fee required to keep a mining lease in good standing triggered a chain of events that resulted in Catear Resources forfeiting the Goldwedge property in northwestern British Columbia. Catear operated a small gold mine on the property in 1988 but ran into financial difficulties and was suspended from trading on the Vancouver Stock Exchange last October for failure to file required documents with the exchange.

The company held a number of prospective properties in the Sulphurets-Eskay Creek region, but the Goldwedge was the most advanced. According to Catear, it hosted a gold deposit with preliminary reserves of 372,325 tons grading 0.82 oz. gold per ton. The Goldwedge property — a 8.7-hectare claim surrounded by the Newhawk-Granduc Sulphurets property — is now held by Exponential Holdings, a private Vancouver-based company. Waterford Resources (VSE) holds the right to earn a 49% interest by making cash and share payments to Exponential, and by bringing the Goldwedge deposit into commercial production by mid-March, 1993. Waterford views the property’s exploration potential as “excellent.”

Waterford director Bill Dynes and business associate John Dupuis have been linked to overstaking activity in the Eskay Creek region to the north of Goldwedge through the consulting firm of Canamera Geological.

But in the case of Goldwedge — and unlike the section 35 challenges in Eskay Creek — the mining lease had reverted back to the Crown and was open for staking.

Public records show that Catear’s $45 rent payment for its mining lease 32 was due Dec. 9, 1989. It was not paid, and the province’s mines ministry served notice, as is required by law, to the company on Jan. 30, 1990, by certified mail received by Catear, that non-payment could result in the forfeiture of the lease.

Ian Gower, gold commissioner for the Skeena mining division in Prince Rupert, told The Northern Miner that he personally made efforts to inform the company of the situation by mail, by registered mail, by phone conversations and by fax. Still, no payment was received.

In an order dated May 16, 1990, Mines Minister Jack Davis ordered the lease forfeited as on March 9, 1990, in accordance with section 45 of the Mineral Tenure Act. This order was also sent by certified mail to Catear’s Calgary office.

Throughout much of all this, Catear President Edward Kruchkowski was involved in on-again, off-again negotiations with Gold Vessel Resources (ASE), a unit of Montreal-based St. Genevieve Resources (TSE), to finance and restructure the company.

In early July of 1990, Catear reported that these discussions involved a $250,000 private placement, a $3-million flow-through financing for Catear’s projects (including Goldwedge), and the purchase by Gold Vessel of a 9% convertible debenture from the Ruegg Bank in Switzerland. The debenture is recorded against the Goldwedge mining lease (which no longer exists), as is a builder’s lien.

But the closing of these transactions stalled because of Catear’s financial problems, and growing uncertainties related to the status of Catear’s main asset, Goldwedge.

It was not until Sept.21, 1990, that Catear reported it had “received notice that it may have lost its interest in the property known as the Goldwedge mining lease” and that legal counsel had been engaged “to vigorously pursue and protect the rights of the company.” At the same time, Catear said it was negotiating with its creditors to settle accounts by issuing shares.