Lac appeal heard in Ottawa; motion for new trial refused

The same day Lac Minerals (TSE) began its final appeal before the Supreme Court of Canada in the ownership dispute over the Page-Williams mine, a Supreme Court of Ontario judge in Toronto ruled against the company in its bid to have the original March, 1986, court decision overturned.

The Toronto trial was an attempt by Lac to discredit the testimony given by prospector Donald McKinnon at the original trial which ended with Corona Corp. (TSE) (then known as International Corona Resources) being awarded the mine upon payment of $154 million to Lac. Sought by Lac was a motion to set aside the earlier judgment and the ordering of a new trial. In Ottawa, the nation’s highest court set aside two days to hear final arguments in the legal battle for the northern Ontario gold mine which produced 242,500 oz gold in 1987 and is expected to turn out more than 300,000 oz this year. Corona first took its ownership challenge to the courts in 1981, when west coast promoter Murray Pezim was chairman of the junior mining company.

“The decision in my mind was dead right,” said Pezim of the Toronto decision when telephoned by The Northern Miner. “We’ll fight them right into the ground no matter what they try.”

Pezim also said he is confident the Supreme Court of Canada hearing in the nation’s capital will go Corona’s way. The Ottawa hearing is the second appeal by Lac, the company having lost a unanimous decision in October, 1987, before the Ontario Court of Appeal. Lac motion Presiding over the latest Toronto trial was Justice Coulter Osbor ne, who by press time had not made public the reasons for his decision. Lac said it brought the motion “on the ground that the earlier judgment was obtained or influenced by the perjured or intentionally misleading evidence,” of McKinnon. It went back to court, Lac said, “following the discovery of evidence or irregularities by McKinnon in the staking, registration and transfer of mining claims in the Hemlo area, including claims subsequently transferred to Corona.”

A prime staker of claims in the Hemlo area, McKinnon has been a central player in the court drama from the beginning along with fellow prospector John Larche.

(Both McKinnon and Larche are named in an April, 1987, lawsuit launched by TSE-listed Scintilore Explorations, which is seeking the royalties owing to the two men from their staking of claims in the Hemlo area. Scintilore said the latest Toronto ruling does not affect that lawsuit or a second lawsuit it has launched disputing ownership of the David Bell mine and an adjacent quarter claim at the Hemlo camp.)

Testimony at the Toronto trial revealed how McKinnon had used another prospector’s name (Edward O’Neill) in the staking and registering of his original Hemlo claims (which have yet to be developed); McKinnon said the use of O’Neill’s name was a ruse to keep other prospectors off his trail. Also revealed was that Lac spent more than $8 million on investigative work by private detectives in an effort to bolster its court case against Corona.

The Page-Williams mine, developed by Lac, has been undergoing a mill expansion and further underground development to allow for an increase in the production rate to 6,000 tons per day by December. Since the 1986 court ruling, Lac has continued to operate the mine in accordance with a 5-year mining plan under the direction of a management committee comprising one Lac nominee, one Corona nominee and a third party agreed upon by both companies.