Final summaries given in Ontex, Metalore trial

Lawyers for Ontex Resources (ASE) and Metalore Resources (TSE) have summarized their final cases in a court battle to settle ownership of the disputed Brookbank gold property near Beardmore, Ont. The property, drilled last year by Placer Dome (TSE), is estimated to host preliminary reserves of at least 1.4 million tons grading 0.23 oz. gold per ton to a depth of 2,200 ft.

In its case, Ontex is seeking to quash two previous contracts signed in 1981 and 1983 with Metalore which saw its interest reduced to a 10% net profit royalty.

The trial, which began Sept. 4, is being heard before Mr. Justice Montgomery in the General Division of the Ontario Court. A central issue in the case has been the fiduciary responsibility Metalore owed to Ontex while it was acquiring control of the claims.

One of the most important documents presented as evidence at the trial by Ontex’s lawyer was a February, 1982, letter to Metalore from geologist Stewart Winter. That letter, found only this summer by Ontex, suggested a tonnage estimate of one million tons grading 0.20 oz. gold per ton for the Brookbank property.

Ontex’s lawyer said the letter was not produced by Metalore during the court action because it would have identified the possibility of a commercial deposit on the property as well as raising difficult questions for Metalore President George Chilian during the litigation. For his part, Chilian said he had forgotten about the 1982 Winter letter and that it had apparently gone missing from Metalore’s files.

Shares of Ontex Resources have traded recently at $1.70 on the Alberta Stock Exchange while TSE- listed Metalore has fallen to a low of $12 from an earlier high of $19 when the trial began in September. A decision from the judge is expected to be handed down early next year.