The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Jonathon Naylor Editor A junior miner suing HudBay Minerals for an alleged contractual breach has scored a victory in court. Callinan Mines claims HudBay violated a royalty contract that entitles Callinan to a portion of the profits from the Callinan and 777 mines. When Callinan filed its lawsuit in 2007, the Vancouver-based company sought access to all HudBay books, records and accounts concerning the mines. A Master of the Court initially denied Callinan access to working papers, prepared by accounting firm Deloitte, relative to annual audits of Callinan's profit-sharing interest in the mines. But Callinan announced last week that upon appeal, that ruling was overturned. The ruling also denied a HudBay motion to strike affidavit evidence given by accountant Mark Lotz, whom Callinan calls its expert witness. In explaining his ruling, Chief Justice Glenn D. Joyal said it "is reasonable to suppose that the nature of the documents in question will include what Callinan anticipates to be detailed calculations and analyses in relation to" its agreement with HudBay. Independent auditor Callinan said that under its contract with HudBay, the calculation of the profit-sharing payments is to be audited annually by an independent auditor, with the results to be provided to Callinan. The junior miner said the ruling confirms its position that all material used to produce the annual audits of the payments, including the working papers of HudBay's auditors, should be provided to Callinan for use as evidence. The judgment is the first ruling since the case was referred to "case management," a process designed to expedite the pre-trial process, Callinan said. Callinan said its goal remains to conduct a full and transparent independent audit of all books, records, and accounts of HudBay's 777 and Callinan mines, to ensure it received timely and proper payments both in the past and for the life of the project. See 'We...' on pg. 6 Continued from pg. 1 John Vincic, vice-president of investor relations and corporation communications for HudBay, would not comment on the ruling. "This matter is before the courts and due to that we cannot provide any comments," he said. Under a 23-year-old agreement, Callinan is entitled to 6.66 per cent of profits from the mines along with 25 cents for every tonne of ore milled from the site. In an October 2010 interview, Callinan spokesperson Braden Maccke would not speculate on how long the lawsuit will take to resolve. He said Callinan has not put a specific cash amount on the lawsuit. "Our intention is to get transparency, our intention is to figure out exactly what expenses were attributed to this (777/Callinan) project," he said. 'Transparency' "It's our feeling some expenses may have been attributed erroneously to the project and we're looking to unwind that and gain some transparency. That's the intention of the suit." HBMS has denied any wrongdoing. In its 2009 year-end financial statement, HudBay stated that Callinan's lawsuit seeks "an undisclosed amount of damages." HudBay, the statement said, "has retained legal counsel and the likelihood of success and materiality of this claim is not reasonably determinable."11/7/11
