Slave battle headed to court

A dispute between joint venture partners Ashton Mining of Canada (ACA-T) and Pure Gold Minerals (PUG-T) is headed for court.

Ashton has filed a statement of defence and counterclaim in BC’s Supreme Court after Pure Gold filed a lawsuit alleging breach of contract against Ashton in late May.

Pure Gold is looking for one or two extra percentage points on several properties held under the Slave Regional joint venture, including the Hydra, Perseus and Artemisia claims. Pure Gold also claims the right to an interest in properties Ashton acquired in Nunavut and the Northwest Territories outside of the joint venture during the past three years. Those would include the Kikerk Lake project Ashton optioned from Caledonia Minerals, a 6-property claim group optioned from Augusta Resource (YAU-V), and the Thonokied Lake project, optioned from private vendors.

Ashton’s counterclaim asserts that Pure Gold has no claim to the properties acquired outside the JV. Ashton also claims that Pure Gold failed to inform it of an opportunity to acquire an interest in the Asiak River, Asiak Lake and North James River properties in Nunavut, and that Pure Gold’s half-interest in the property is in fact held in trust for the Slave joint venture. The suit also seeks damages for Pure Gold’s breach of contract.

In mid-May, Pure Gold announced a deal to earn a 50% stake in the North James Bay property in Nunavut’s Coronation Gulf district from Hunter Exploration Group by paying $50,000 in cash and issuing 200,000 shares over two years. The deal also calls for Pure Gold to fund $500,000 worth of exploration over four years.

The claims are subject to a 2% net smelter royalty on base and precious metal production and a 2% gross over riding royalty on diamond production. An annual advanced royalty payment of $12,500 begins on Aug. 30, 2003.

The 403-sq.-km property is about 90 km northeast of the Artemisia and Potentilla kimberlite discoveries.

Recently, an 11-tonne mini-bulk sample from Artemisia surrendered an uninspiring 1.176 carats of diamonds larger than 0.8 mm square mesh, for a sample grade of 0.107 carat per tonne, or 10.69 carats per 100 tonnes. No further work is planned on Artemisia.

Artemisia is found on the Kim property, which is part of the Slave Regional joint venture, in which Ashton has an 89.4% interest and Pure Gold the remainder.

In other news, Pure Gold has lowered the exercise price of 6 million outstanding warrants to 9.5 from 20 per share. The change affects warrants cashed in on or after Aug. 23.