Glimmer dispute remains unresolved

A court ruling has both sides of a mine ownership dispute claiming victory once again.

The Glimmer gold mine in northeastern Ontario is held 65.35% by Exall Resources (EXL-T), with the remaining interest held by Glimmer Resources (GME-V). The two companies’ joint-venture agreement enabled Exall to assume operatorship of the mine on the basis of its majority share. In December, an Ontario Court (General Division) decision on a dispute over the parties’ contributions to the joint venture came down in favor of Glimmer.

At that time, Glimmer President Richard McCloskey stated that as a result of that decision, Exall’s position in the joint venture would be considered diluted to such a degree that Glimmer would have a majority interest and the right to take over as operator.

In late January, the same court rejected Exall’s argument that the flat fee of 15% of total costs that it had been charging as a management fee was proper. In its own release, however, Exall states that the court ruled that Exall was permitted to apply costs of supervision and certain engineering costs as part of the cash contributions used to calculate each partner’s equity in the mine.

“The inclusion of these costs in the expense calculations brings our cash contribution to the joint venture well over the level needed to ensure our majority interest and continued operation of the mine,” Exall Chairman Stephen Roman stated in the release.

Glimmer maintains, however, that “the demonstrated costs will be substantially less than the credit Exall has already taken.” Glimmer also notes that the judge rejected Exall’s argument that it would be possible, under the Exall-Glimmer agreement, for one of the parties to “claw back” with later payments any interest lost through failure to make ongoing monthly cash contributions.

A further court proceeding will determine the parties’ respective equity in the Glimmer mine.

Minable reserves were most recently pegged at 731,169 tonnes grading 12.9 grams gold. The deposit remains open at depth and along strike.