Black Swan at odds with Goldbelt

A new dispute is brewing between Black Swan Gold Mines (TSE) and Goldbelt Resources (VSE). The companies are at odds over a settlement agreement made in January, 1992, regarding the Leninogorsk gold tailings project in Kazakhstan.

Black Swan relinquished any right to the tailings project under the settlement and Goldbelt now holds a 50% interest in Leninogorsk, with the remainder held by a state controlled company.

Black Swan recently filed a lawsuit against Goldbelt in the Supreme Court of British Columbia seeking specific performance of that 1992 agreement. The company alleges that Goldbelt is required to issue an additional 3,175,592 shares to Black Swan in order to meet the terms of the agreement. At the time of the settlement, Black Swan received 1.2 million shares plus a cash payment of $308,000.

Bryce Porter, a director of Black Swan, said the 1992 agreement requires Goldbelt to issue further shares after completing $5.5 million in financing in order to bring Black Swan’s equity interest up to 5% on a fully diluted basis.

Goldbelt met the $5.5 million financing level with the completion of a recent private placement to the Emerging Markets Gold Fund and, as a result, the shares are payable, according to Porter.

Goldbelt views the situation differently, however.

“It’s a question of interpretation (of the January, 1992, agreement). We believe the action is not justified and we will defend it”, said Mike Muzylowski, co-chairman of Goldbelt.