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 lawsuit involving the future site of the Reed mine outside Snow Lake will have an unclear impact, if any, on the planned operation. VMS Ventures, which owns 30 per cent of the Reed Lake Joint Venture with Hudbay holding the remainder, is being sued by another junior miner, W. Bruce Dunlop Ltd. Though it was not immediately clear what Dunlop is alleging, the suit seeks to have VMS give up its ownership stake and instead take a two per cent net smelter royalty in the joint venture. Asked whether the suit would impact the planned Reed mine, Rick Mark, CEO of VMS, said he did not think so but could not be definitive since Hudbay would be the mine operator. 'Hudbay is aware of the lawsuit, as everyone else is now, but I think that's a question you would have to pose to Hudbay,' he said in a phone interview. Asked whether the suit would impact Hudbay's production plans at Reed, chief operating officer Tom Goodman said the company will not 'comment on any matter between other parties.' Tom Davie, president of USW Local 7106, the largest local union at Hudbay, said he was not aware of the lawsuit. He had no comment when reached Tuesday. Production Hudbay said previously it expected first production at Reed to begin between July and September of 2013. The mine is to last five years and employ nearly 80 people at full production. The Vancouver-based VMS denies any wrongdoing. Mark said the company's position is that its board cannot comply with the lawsuit. 'Clearly the 30 per cent ownership position is worth more money today...than the two per cent (net smelter royalty) position is,' he said, adding that the former is valued at about 10 times more than the latter. Mark said reverting to a net smelter royalty would make no sense and he 'can't imagine why a judge would demand that we would do that.' See 'Agree...' on pg. 7 Continued from pg. 1 In a letter to VMS shareholders, he said his company's agreement with Dunlop 'clearly empowers VMS to negotiate and enter into the Reed Lake Joint Venture without any notice to, or interference from, Dunlop.' The Winnipeg-based Dunlop is the vendor of certain claims comprising the joint venture pursuant to an agreement signed in December 2008. If successful, the lawsuit would make VMS a non-participating party in the joint venture 'in order to trigger certain alleged royalty entitlements, largely benefiting Dunlop at the expense of all other VMS shareholders,' VMS said in a news release. Court date VMS's lawyer believes it's conceivable the two parties could be before a judge in August or September at the earliest. 'We'd like it to happen as soon as possible,' said Mark. Mark admitted he was taken aback by the lawsuit, which VMS announced last week. 'We've known the Dunlops for a long time. We have been in discussions with the Dunlops over the last six weeks or so about this issue,' he said. 'Was I surprised that they filed a suit? Yes, I was. But again, I don't think that's significant to the fact that the suit was filed.' W. Bruce Dunlop Ltd. could not be reached for comment. The company's listed phone number was out of service, and it did not issue a news release to detail its position. The planned Reed mine site is located about 50 kilometres west of Snow Lake.
