Vancouver — A district court in Montana has dismissed a complaint by Canyon Resources (CAU-X) for a federal “takings” claim by the company-led Seven-Up Pete joint venture, which had sought to develop an open-pit gold mine at the McDonald project near Lincoln.
Canyon and its Seven-up Pete partners spent more than US$70 million to advance the gold project toward production in the 1990s, but environmentalists opposed to the project won public support for an initiative that specifically banned the use of cyanide to recover gold from open-pit mines.
No compensation was offered or paid by the state, forcing Canyon to seek remedies in the courts after its interest in the McDonald property and nearby properties were rendered worthless because of the cyanide ban. The company had outlined resources containing an estimated 10.9 million oz. gold before the ban was imposed by legislation.
Canyon notes that the district court, Helena Division, based its dismissal on technical grounds, without deciding the merits of the case. The company remains confident in the merits of the case and intends to file notice of appeal of the decision to the U.S. Court of Appeal.
Meanwhile, the company is looking to restart its Briggs gold mine in California, while it advances the Reward gold project to feasibility in Nevada. The company also holds uranium properties in Wyoming.
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