Exall, Glimmer make amends

Partners Exall Resources (EXL-T) and Glimmer Resources (GME-V) are resolving a 3-year-old dispute over the Glimmer gold mine in northern Ontario.

The two have signed a heads-of-agreement, details of which were unavailable at presstime.

The dispute relates to dilution clauses in a joint-venture agreement between Glimmer and Hemlo Gold Mines. The agreement referred to exploration and development of the property. Exall, which bought Hemlo Gold’s 60% interest in 1996, claimed that Glimmer’s interest had been diluted by a failure to meet cash calls during the development stages of the project. At that time, the costs were covered by Exall.

Glimmer had claimed that Exall failed to make its required monthly cash contributions to the project between September 1996 and February 1997. Exall, on the other hand, held that the inclusion of supervisory and certain engineering costs (as allowed by court rulings made subsequent to the period in question) brought it well over the level needed to ensure its majority interest and continued operation of the mine. A further court proceeding was to have determined each party’s equity in the mine.

Exall currently operates the mine, in which it holds a 65.35% interest; Glimmer holds the remainder. This could change as a result of the recent agreement.

At the year’s start, Glimmer hosted total reserves of 1.1 million tonnes averaging 8.31 grams gold per tonne. Another 1 million tonnes grading 4.61 grams are classified as resources.

In the first six months, the mine produced 22,331 oz. at an average cash cost of US$296.95 per oz. A total of 132,472 tonnes of ore was milled.