VenCan cuts Edwards lease

VenCan Gold (VCG-M) has announced it is terminating the lease under which River Gold Mines (RIV-T) operates VenCan’s Edwards gold mine northeast of Wawa, Ont.

Under the terms of the lease, VenCan receives 50% of the mine’s operating profit, less its share of “development and mining costs” defined under the agreement between the two companies. The mine, which produced 30,414 oz. of gold in 1997, is operated by River under a contract negotiated in March 1996.

VenCan is disputing a $425,845 loss that River ascribed to the Edwards operation in 1997. VenCan claims the mine made a profit of at least $1.4 million during that year, and late in August demanded that River pay half that amount.

River, for its part, has offered to take the dispute over the operation’s books to arbitration as provided under the lease agreement. The company has sued VenCan for breach of contract, breach of confidence, and defamation in making public its claims against the contract.