Rayrock files legal action for right of access at Dee mine

Lawyers acting for Dee Gold Mining, the unit of Rayrock Yellowknife Resources (TSE) that operates the Dee gold mine, have filed an action in a Nevada district court to acquire an easement across the adjacent property owned by FMC Gold (NYSE) and Baroid Drilling Fluids.

The Dee property, situated in the Carlin Trend, features an open-pit operation near its boundary with FMC and Baroid’s Rossi barite property. The action seeks “condemnation” by the State of Nevada, which would amount to a declaration by the court that an easement exists over the land.

Rayrock contends it requires an easement on the Rossi property for access to its pit and for the excavation of lay-backs, estimating that the area it needs is a strip about 300 metres wide.

According to Rayrock’s calculation, recoverable reserves at the Dee mine, estimated at 550,000 oz., would be reduced by 198,000 oz. without the access the easement would provide.

The area is host to the Deep North Extension of the deposit, discovered in 1993 and developed over the past year. “When we were doing our definition drilling, FMC was well aware of it,” says Jane Wilson of Rayrock. “We were sharing information and they knew we were doing stripping and laying back on to their claims.”

FMC and Baroid had allowed Dee to construct and use haul roads across a corner of the Rossi property for about five years, but then denied the company access. Dee rerouted its haul roads and tried to negotiate with FMC for access, but the parties could not come to an agreement. “We’ve been trying to negotiate with them for quite some time now, and we just haven’t been able to resolve it,” says David Hutton of Rayrock. “We felt we couldn’t wait. [The action] will make the parties come to some accommodation.”

At presstime, neither FMC nor Baroid had received formal notification of the court action and, consequently, could not comment.