Freewest, Canaco plan suit over claims near Benoit find

Two juniors, Freewest Resources (TSE) and Ressources Minieres Canaco (ME), are planning lawsuits seeking a total of $5.9 million in damages against Forbex Mining Resources (ME) over disputed claims close to a gold discovery at Benoit Twp. in Quebec’s Abitibi area.

Freewest’s claim is for $4,095,000 and Canaco’s claim is for $1,797,610; the legal claims relate to two petitions by Forbex disputing 54 claims near the gold discovery. Thirty-nine of the disputed claims are held by Montreal-based Freewest, 15 by Rouyn-Noranda-based Canaco.

The gold discovery, made last winter, contains a reserve estimate of 550,000 tons of 0.22 oz. gold per ton. It is considered a major discovery in that it is the first in the sector, said Jacques Trottier, a geologist with Ressources Coleraine (ME), which is associated with Canaco.

Rouyn-Noranda-based Forbex argues there was no physical evidence of stakes close to the disputed claims at Pusticamica Lake, either on islands or shores of the lake, and that stakes should have been placed on islands closest to the disputed claims site, which is located on the lake bottom. But Freewest and Canaco say the claims were properly staked out and filed with the government and that they did the best possible job of staking under winter weather conditions.

“We’ve been extremely tolerant and patient up to date,” said Canaco President Yves Morissette. “But enough is enough.”

The two junior mining companies also blasted the Quebec Ministry of Energy and Resources for foot-dragging on the 9-month-old dispute. They said it took five months before an inspector from the ministry showed up on the site to examine the disputed claims. There has been no decision made since the Aug. 15 visit by an inspector from the Service des titres miniers. “I personally feel this never should have happened,” said a disappointed Mackenzie Watson, president of Freewest.

The problem stems in part from Quebec’s recent revision of its mining act, says Mike Atkins, a consulting geologist with Freewest

“If this is allowed to go on, it means every claim in the province is in jeopardy,” Watson said. “Every claim in this province is in jeopardy of being claim-jumped under the present rules.”

Whatever happens, Freewest plans to start a $600,000 diamond drilling program of up to 20,000 ft. in January to further study the known gold zones and explore other similar zones. Freewest has so far spent $1 million on the site. Watson said Freewest is currently negotiating with two majors, which he would not name, for joint exploration of the Benoit site.

However, he said the dispute has had a major effect in holding up the spending of exploration money. He said some majors have told him, “Mack, your claims are in dispute, we don’t want to touch it.”

Watson said the claims for damages are based on the number of disputed claims outstanding and falling stock prices attributed by the companies to the unresolved situation.

Although their respective boards of directors have authorized legal action against Forbex, Watson and Morissette would not say when this might begin. All Watson would say is that a court claim will be filed in the “very near future.”

Daniel Kucharsky is a freelance writer in Montreal.