Placer Dome (PDG-N), Cortez Gold Mines and ECM, a private company, may soon return to court to settle their differences regarding the Pipeline deposits in central Nevada.
The U.S. Ninth Circuit Court of Appeals has remanded to trial ECM’s claim that Placer owes back royalties on the Pipeline and South Pipeline.
Placer’s subsidiary, Placer Dome U.S., serves as operator of the Cortez Gold Mines joint venture, which is currently mining Pipeline and South Pipeline.
Rio Tinto (RTP-N) subsidiary Kennecott Explorations (Australia) holds a 40% interest in the joint venture, while Placer holds the remainder.
ECM asserts that the Pipeline deposits lie in an area in which, as stipulated in ECM’s agreement with Royal Gold (RGLD-Q) (which later joint-ventured the ground to Placer), ECM holds a royalty interest.
Royalty payments to ECM could amount to as much as US$100 million, says ECM President Patrick Cavanaugh.
Placer would not comment on the value of the disputed royalties.
A 1995 summary judgment had dismissed ECM’s initial claim, however the appeal court decision means the case will go to trial once again. No date has been set for the proceedings.
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