Montana judge dismisses Canyon suit

A judge in Helena, Mont., has thrown out a lawsuit by Canyon Resources (CAU-X) that claimed a 1998 state ban on cyanide use in gold mines illegally blocked plans for an open-pit mine near Lincoln, 300 km northwest of Helena.

District Judge Jeffrey Sherlock upheld the ban, known as Initiative 137, as constitutional, saying it neither altered any contract between the state and Canyon nor took away the company’s property.

The state never signed any document promising developers they would be allowed to open the mine and use cyanide in its operation, Sherlock said. Furthermore, developers of the Seven-Up Pete joint venture had no property rights in the project but merely held leases giving them the right to apply for a mining permit.

Until that application was approved, Sherlock said the joint venture had only the right to pursue its application, subject to existing and future environmental regulations.

Although the suit did not specify how much the state should have to compensate the company, Canyon President Richard DeVoto told the Associated Press the amount could be more than US$500 million.

He added that his company is prepared to appeal to the Montana Supreme Court or revive a similar suit against Initiative 137 in federal court.

“This suit is immensely important to the citizens of Montana [because this is] a world-class gold mining district containing at least 13 million ounces of gold,” DeVoto said.

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