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 Hudbay's corporate partner in the planned Reed mine has filed a statement of defense against a lawsuit. VMS Ventures said in an e-mail to investors last week that the statement had been filed in the Manitoba courts as of May 31. VMS is being sued by another junior miner, W. Bruce Dunlop Ltd., which wants VMS give up its ownership stake in Reed and instead take a far less lucrative two per cent net smelter royalty. Through a 2008 agreement, the Winnipeg-based Dunlop sold to Vancouver-based VMS certain claims comprising the Reed joint venture. In its e-mail, VMS called Dunlop's statement of claim 'a thinly veiled attempt to remake, solely in Dunlop's favour,' that agreement. VMS said Dunlop 'willingly entered' the agreement, receiving three million VMS shares, a payment of $375,000 and a potential future payment of $600,000 in revenue from mining operations on the purchased property. The 'facts alleged and relied upon by Dunlop to give rise to this action are supported only by unsubstantiated and inaccurate allegations,' VMS said. 'It is important to note that the agreement and the consequent payment and share issuance were made long before there was any demonstrable proof that the property, or combined properties, might contain any economic ore body,' VMS said, 'and at a time when copper prices were in the $1.60 per pound range, which is less than half of the current price of the commodity.' Not only will VMS 'vigorously' defend itself, the company said it is also seeking reimbursement of legal costs from Dunlop 'given the nature of Dunlop's claim.' As of press time, The Reminder was unable to obtain a copy of Dunlop's statement of claim. Dunlop 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. It does not appear the lawsuit will impact the previously announced mine to be established at Reed by Hudbay, which owns 70 per cent of the project to VMS's 30 per cent. Rick Mark, CEO of VMS, said previously he did not think the lawsuit would hinder the plans but could not be definitive since Hudbay would be the mine operator. Hudbay has given no indication its intentions at Reed have changed. The company has said it expects first production at Reed between July and September of 2013. Located about 50 km west of Snow Lake, the mine is expected to last five years and employ nearly 80 people at full production. VMS's lawyer believes it's conceivable VMS and Dunlop could be before a judge in August or September at the earliest. Pre-feasibility Meanwhile, VMS has announced that a pre-feasibility study of Reed is available for viewing at Sedar.com. The study, prepared by Hudbay and a consulting firm, 'demonstrates that the indicated resources can be converted to reserves and economically viable for extraction by long-hole open stoping at a rate of' 1,300 tonnes per day, VMS said. See 'Truck...' on pg. 6 Continued from pg. 3 Ore from Reed is to be transported by truck to Flin Flon, where it will be crushed. The ore will be batched independently through the Hudbay concentrator with assumed recoveries of 94 per cent copper, 58 per cent gold and 62 per cent silver producing a copper concentrate. Access to Reed's underground mineral resources will be via a trench, portal and decline located near the centre of the surface site. The decline will be excavated six metres wide and five metres high to a depth of 510 metres from surface, and be able to accommodate a 60-tonne truck. Ore and development waste will be hauled to surface via the decline. The Reed project will be powered by diesel generators and power distributed to surface buildings and underground.
