Hudson Bay drops option on Metalore’s Brookbank

Hudson Bay Gold has terminated its option agreement with Metalore Resources which was signed more than 1 1/2/ years ago. The deal, which committed Hudson Bay to sinking a 1,800-ft shaft on Metalore’s Brookbank property near Beard more, Ont., was burdened by a legal suit. The plaintiff, Ontex Resources, is seeking return of the property or $500 million in damages from Metalore.

Ontex, which holds a 10% royalty interest in the claims, alleges that Metalore withheld valuable exploration information which ulti mately led to Ontex’s interest in the property being reduced to a 10% net profits royalty. Metalore, which dismisses the claims, has filed a counter claim against Ontex.

“We met face to face (with Ontex) for a whole week early in January in a last concerted effort to make some compromise and get the development flying,” George Chil ian, president of Metalore, tells The Northern Miner. “But every time we thought we had it resolved, they would come back the next day and make further unreasonable de mands.”

Hudson Bay had said on several occasions that underground exploration would only proceed if Ontex agreed to the terms of the Hudson Bay-Metalore option agreement. Chilian notes that Metalore, which has a counterclaim filed against Ontex for $44.6 million, “will be compelled to substantially increase the counterclaim to include the value which would have been provided by Hudson Bay.” Chilian also notes that there are no immediate plans for the property.

The Brookbank property came into prominence in March, 1986, when Metalore announced the results of several deep drill holes which intersected high grade gold mineralization across good widths (N.M., Mar 24/86).