Alberta-based Takla Star Resources (ASE) recently launched a major lawsuit in Ontario seeking the return of a graphite mining property at Graphite Lake, Ont., from Cal Graphite (VSE). Takla Star is also seeking $200 million in damages against the company, and $200 million in damages against directors Edward Blanchard and John Stirling and others.
The claims cover a graphite deposit that Cal Graphite describes as hosting proven and probable reserves of 60 million tons containing an estimated three billion pounds of crystalline flake graphite.
The statement of claim alleges that Blanchard and others breached duties owed to Takla Star (then a private company named The Graphite Corp.) regarding certain claims sold to it in 1983 by a corporation partially owned by Blanchard.
More specifically it is alleged that Blanchard, while a director and officer in charge of operations of Takla Star, caused the graphite claims to be re-staked and recorded in 1985 for the benefit of himself and the other defendants. Blanchard, Stirling, and the others are then alleged to have incorporated Cal Graphite for the purpose of exploiting the claims and other surrounding claims.
The statement of claim further alleges that Cal Graphite “knew or ought to have known of Blanchard’s action, took part in the breach of fiduciary duties, consequently became a constructive trustee of the mining property for Takla Star and holds all monetary and other benefits flowing from the mining property for Takla Star.”
Takla Star’s corporate secretary John VanRiper told The Northern Miner that the company did not have funds to pursue this legal action until new management revived the company last year. Ronald Slaght of McCarthy Tetrault of Toronto was retained to act on Takla Star’s behalf.
Cal Graphite has not yet responded to the lawsuit, and phone calls to the company by The Northern Miner were not answered.
Cal Graphite is reported to have started up a mill in August, 1990, which processed ore averaging 2.5% graphite at 1,200 tons per day. But the company later reported that changes and adjustments would be required to improve throughput and recoveries and to meet customer specifications for the end product.
In the summer of 1991 the company issued a news release stating that operation of the mill was improving “slowly but steadily,” with output rising to 10 tons per day of finished product.
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