Matachewan Consolidated Mines (TSE) is preparing to defend itself against a recent government order to clean up tailings material that spilled into the Montreal River in October, 1990.
To pay for the legal costs of appealing the order, Matachewan is seeking permission from shareholders to sell some or all of its assets to associate McChip Resources (TSE) and other companies controlled by the McCloskey family. The order was served by the director of the Ontario Ministry of the Environment after a burst beaver dam caused Matachewan’s 20-hectare tailings pond near Matachewan, Ont., to overflow. Matachewan President Richard McCloskey claimed last winter that his company is in no way responsible for the spill that discharged 40,000 cubic metres of tailings into Davidson Creek. While Secretary Edward Dumond declined to estimate how much Matachewan’s legal bill will be, he admitted that the eventual costs could be substantial. With a decision expected from the Environmental Appeal Board expected later this month, Matachewan is attempting to negotiate a settlement. “In the event that future costs and expenses cannot be avoided, Matachewan will be required to dispose of all of its assets and will cease to carry on business,” the company says.
The Toronto Stock Exchange recently suspended trading of Matachewan shares for not paying sustaining fees. The order was also issued because Matachewan does not meet the TSE’s market capitalization requirements.
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