Mercur ruling in Barrick’s favor

Toronto-based American Barrick Resources (TSE) has won what it regards as a major victory in its legal fight with a Utah-based exploration company for control of the Mercur Gold mine in Utah. Barrick says it has won a motion for partial summary judgment in its litigation with Gold Standard (NASDAQ), stating that the Utah company’s 25% working interest in the mine was properly converted to a 15% net profits interest.

The ruling, handed down by Judge Frank Noel of the Third District Court for Tooele Cty., Utah, contradicts Gold Standard’s contention that it had the right of first refusal on the remaining 75% interest in Mercur before the mine was sold to Barrick in 1985.

The court also found that the 1973 agreement under which Gold Standard’s 25% working interest was converted to a 15% net profits interest was clear and unequivocal.

Having produced 117,536 oz. gold last year, Mercur is the second largest, behind Goldstrike in Nevada, in Barrick’s stable of six gold mines.

Although Gold Standard says it may launch an appeal, the judge has ruled that all claims relating to the improper conversion of Gold Standard’s interest have now been dismissed, says Barrick spokesman Greg Wilkins.

“We feel vindicated now that the judge has looked at the agreement and concurred without feeling that there is no merit to the claims that Gold Standard is making,” says Wilkins.

In a lawsuit scheduled to be heard in a Utah courtroom April 30, Gold Standard is alleging that Barrick also profited from confidential information provided by Gold Standard to an English merchant bank before the mine was sold.

Gold Standard says it believes the court ruling is erroneous. “It contains internal inconsistencies which need clarification and it appears to be based upon legal misconceptions which were represented to the court by the defendants,” the company says. Other ancillary minor claims are still being disputed and may also go to trial, Barrick says.