Minerex ordered to pay mine contractor

A tribunal of the American Arbitration Association has ruled that Vancouver-based Minerex Resources (TSE) and the Aurora Partnership must pay nearly US$1.4 million in damages to a former contractor at the companies’ gold mine in Nevada. Minerex is operator and 50% owner of the Aurora Partnership’s open pit, heap leach gold mine in Mineral Cty., Nev. The mine was brought into production in 1987.

A previous mining and crushing contractor at Aurora was replaced in December, 1988, with one year remaining in its contract for failure to meet the 1987-88 production and crushing schedule.

The contractor subsequently filed suit against Minerex and the Aurora Partnership by exercising its right to be heard through arbitration before the American Arbitration Association.

A decision by the tribunal, handed down on July 13, awarded the primary contractor damages of US$1.39 million, while the subcontractor was awarded damages of US$218,962 against the primary contractor.

The company and the Aurora Partnership are reviewing various options to defend the arbitration award with their legal counsel.

Minerex Resources realized net earnings of $1.08 million (10 cents) per share for the year ended Feb. 28 on revenue of $13.52 million, while operating cash flow amounted to 31 cents per share.

Production last year totalled 28,126 oz. of gold and 37,754 oz. of silver at an average cash operating cost of US$266, while the average selling price was US$397 per oz.

This year the company has sold forward 13,800 oz. at US$401 per oz. and has options to deliver another 4,500 oz. at US$400 by March, 1991. Production for the current fiscal year is forecast to be 27,500 oz., according to Minerex.