Nuinsco, Echo Bay suing each other over Cameron Lake

Toronto-based Nuinsco Resources (TSE) has launched a counter-suit against Echo Bay Mines (TSE) for breach of fiduciary duty involving the Cameron Lake gold property in northwestern Ontario.

Echo Bay, which sold its 53.8% interest in Nuinsco to Deak International Resources (TSE) in November, 1988, spent $6.7 million to conduct a feasibility study at Cameron Lake before deciding that the project was uneconomic.

Early last year, Echo Bay launched a 2-part lawsuit against Nuinsco calling for the balance of funds owed to it for mining equipment and services allegedly provided to Nuinsco.

But in its counter-suit against Echo Bay and wholly owned subsidiary Zanford Mining Services, Nuinsco is asking for a full accounting of money spent at Cameron Lake under the original joint venture agreement.

While seeking damages of $2.5 million, Nuinsco is also claiming repayment of all monies paid to Echo Bay or Zanford not included in the joint venture deal.

Also, Nuinsco alleges that Echo Bay breached its fiduciary responsibilities by withholding financial, geological and mining information from certain directors of the company.

According to Nuinsco President Douglas Hume, his company had agreed to pay the $800,000 it owed Echo Bay for equipment. But he said no explanation was ever provided for an additional $380,000 plus accrued interest.

“We are waiting for them to make the next move,” he said.