A settlement was reached between Pegasus Gold (TSE) and Pioneer Metals (TSE) which, if concluded, will eliminate all debts owed to Pegasus as well as all outstanding legal disputes between the two companies. Completion of the agreement would result in the transfer to Pegasus of Pioneer’s interest in the Stibnite gold mine in Idaho.
The deal is subject to an audit of the debts and assets of the Stibnite mine and the verification of certain engineering data relating to the mine.
Pegasus and Pioneer have been waging a legal battle over the Stibnite mine since December, 1989. The lawsuits stemmed from a $12- million loan from Pegasus and secured by Pioneer’s U.S. properties. Pegasus subsequently filed suit, claiming Pioneer had defaulted on the loan and the companies have been fighting since.
If the agreement can be completed, it would free up Pioneer’s Bonito property in New Mexico. Placer Dome (TSE) had an option to earn a 60% interest in the gold- silver property but let it lapse this year because of uncertainty over the legal disputes.
Pioneer expects an audit of the Stibnite operation to take in the order of two weeks.
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