Cream Silver wins legal battle

The Supreme Court of British Columbia has ruled that Cream Silver Mines (VSE) is entitled to compensation for the loss of mineral claims “expropriated” by the provincial government in 1988.

As of mid-November of that year, Cream Silver held 106 located claims in Strathcona Park, adjacent to the Westmin mine which has operated in the Vancouver Island park since 1966. Strathcona was then a class B park, where mineral exploration was allowed with the permission of the minister of parks. But the company’s efforts to explore its claims were thwarted by protesters who sought to have the park upgraded to class A status where exploration or development is not allowed.

The government subsequently reclassified the park to class A status through an order-in-council, thereby denying Cream Silver the opportunity to develop its mining claims or to carry on any mining activity.

The judgment of Mr. Justice Maczko concludes: “I find that the Crown has expropriated a chattel interest from the plaintiff and that the plaintiff is entitled to compensation for that loss.”

Cream Silver President Frank Lang said the company was not allowed to drill a geophysical anomaly which was viewed as prospective for mineral deposits similar to those being mined on the adjacent Westmin mine property. “Westmin has been finding new orebodies on its property, and the probability was good we might have found something on ours,” Lang told The Northern Miner. The amount of the compensation in the Cream Silver case will be determined at a later date. The provincial government recently indicated, however, that it intends to appeal the decision.

In a separate case involving Casamiro Resource (VSE), the British Columbia Court of Appeal earlier this year upheld a decision that the government expropriated the interests of that company and two private co-venturers on their Crown granted claims within Strathcona Park.

The Court of Appeal ruled that the order-in-council passed in 1988 prohibiting any more park use permits from being issued, for exploration work in the park constituted an expropriation of the interests of the company and its co-venturers.

As a result of this decision, the companies are now proceeding with their claim for compensation before the Expropriation Compensation Board.