A unit of Placer Dome (TSE) is continuing work on the Pipeline gold deposit in Nevada although Gold Fields Mining recently launched a lawsuit seeking the return of claims believed to contain about 45% of the deposit’s currently estimated gold resource.
The Pipeline deposit is widely considered to be the most important gold discovery made in North America last year.
The land in dispute is adjacent to claims controlled by the Cortez joint venture owned 60% by Placer Dome and 40% by Kennecott. Placer Dome discovered the Pipeline deposit in 1991, and subsequent drilling led to a preliminary resource of 11.3 million tons grading 0.24 oz. gold per ton, equivalent to 2.7 million oz. in the ground. An updated reserve estimate is being prepared, and completion of a feasibility study for development of a mine is still planned for early 1993.
The legal battle began when Gold Fields advised Placer Dome that in its view, a 1991 purchase agreement for the disputed land was void because of an alleged failure by Placer Dome to fully disclose certain facts. Gold Fields is a division of a subsidiary of Hanson PLC of Britain.
Placer Dome, contending it had negotiated the agreement in good faith, then filed a complaint for declaratory relief and is now seeking a judicial determination from the Nevada court that the prospecting permit and purchase option agreement cannot be invalidated.
Meanwhile, a wholly owned subsidiary of Royal Gold (NASDAQ), Royal Crescent Valley, says it has filed a complaint in the U.S. District Court alleging that Placer Dome U.S. failed to disclose certain facts when it purchased in 1990 the interest of Royal Crescent in the Royal-Cortez joint venture.
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