Bond, Kenora settle Shoal Lake dispute

A legal battle between Kenora Prospectors and Miners (COATS) and Bond Gold Canada concerning the Shoal Lake mining claims in northwestern Ontario has been settled. To end the year-old litigation between the two companies, Kenora Prospectors has agreed to option all of its interests in Shoal Lake and some contiguous mining claims to Bond in return for several scheduled payments and a royalty interest. Under the terms of the agreement, Bond, a unit of Bond International Gold (TSE) must spend $1.7 million on the claims by Sept. 21, 1994. At least $175,000 of this total must be spent by Sept. 21, 1991. Each year thereafter, Bond must spend an additional $500,000 until 1994. Bond must also pay Kenora Prospectors $150,000 per year on the same schedule, with an initial payment of $287,000 when shareholders approve the deal. Kenora Prospectors will retain a royalty interest in the property, which will vary depending on a number of factors.

At any time before Sept. 21, 1994, Bond Gold may exercise its option by paying Kenora Prospectors $3 million. At this point, Bond would have no obligation to make any further payments or incur any further expenditures.

In November, 1989, Kenora filed a lawsuit against Bond Gold, claiming that Bond had failed to spend the $2.45 million required by the terms of the option agreement and therefore had no right to an interest in the Shoal Lake mining claims. Under the new deal, all current lawsuits between Kenora Prospectors and Bond will be dropped. The agreement is subject to approval from Kenora Prospector shareholders.