Aquiline basks in Navidad victory as IMA vows to appeal

Vancouver After seven months of deliberation, the Supreme Court of British Columbia has ruled in favor of Aquiline Resources (AQI-T) after determining that IMA Exploration (IMR-V, IMR-X) had unlawfully used confidential geological information to discover and stake the Navidad silver deposit in the province of Chubut, Argentina.

IMA announced a bonanza-grade silver discovery at Navidad in early 2003. Subsequent work outlined a silver deposit with associated base metals presently ranked as one of the largest and most significant discoveries of its type in the world.

Aquiline launched legal proceedings against IMA in early 2004, on the grounds that IMA had breached a confidentiality agreement and unlawfully used geological information held by its subsidiary, Minera Aquiline Argentina, to identify and acquire the Navidad project. At the time, in 2002, IMA was a potential purchaser of the Calcatreu project, which was put on the block by a major mining company and ultimately purchased by Aquiline. Each potential purchaser, including IMA, signed a confidentiality agreement before receiving access to data and the site for the purpose of evaluating the project.

Madam Justice Koenigsberg’s reasons for judgment in favor of Aquiline draw heavily on the famous 1989 case in which the Supreme Court of Canada ordered Lac Minerals, as a result of it having obtained a mining property through the unlawful use of Corona Resources’ confidential information, to hold in trust for Corona what eventually became “a billion dollar mine” in the Hemlo gold camp of Ontario.

The court found that IMA had received certain bulk leach extractable data (a stream-sediment sampling methodology) related to its review of the Calcatreu project, that such data were “confidential in nature,” and that IMA used the data to locate and stake the Navidad property in breach of the confidentiality agreement. Accordingly, the judge ordered IMA to transfer the Navidad claims to Aquiline upon payment of “reasonable acquisition and development costs” incurred by IMA.

Aquiline President Marc Henderson welcomed the judge’s decision, which he stated “should finally bring clarity to the ownership of Navidad and accelerate the development of this world-class project for the benefit of all stakeholders.”

IMA intends to appeal the judgment and will ask the Court of Appeal to set aside the judgment in its entirety on the grounds that the trial judge’s interpretation of the confidentiality agreement is “contrary to the terms of the agreement itself, industry practice and understanding, and the facts made known at the trial.”

Shares of Aquiline more than doubled to $6.40 before settling back to $5.20, while shares of IMA tumbled to $0.69 from a pre-announcement trading range of between $3 and $3.50.