Friends go to court (April 25, 2005)

Unresolved differences in interpretation between Hecla Mining (HL-N) and Great Basin Gold (GBG-T) over provisions in the companies’ deal for development of the Hollister property in Elko Cty., Nev., have been put in front of the Nevada courts.

Hecla, which is earning-in on the project by driving a ramp and underground drifts, and performing underground drilling, is seeking the court’s interpretation of the August 2002 agreement between the companies. The deal requires that Hecla fund US$21.8 million in exploration and development work “or otherwise achieve commercial production” at Hollister.

Great Basin said the unresolved issues were over the timing of project milestones. Both companies released statements implying that relations between them remained good.

Hollister’s inferred resource is 654,000 tonnes grading 44.2 grams gold and 240 grams silver per tonne.