Seabridge Gold (TSX: SEA) is heading back to court. The latest proceedings relate to a Notice of Civil Claim that was filed by Tudor Gold (TSXV: TUD) in the Supreme Court of British Columbia against the Province of British Columbia.
The claim is in relation to prior tunnel authorizations that Seabridge has received for the Mitchell Treaty Tunnels, with Tudor challenging the legal effect of the conditional mineral reserve that requires Tudor to not “obstruct, endanger or interfere with, the construction, operation or maintenance of” of the said tunnels.
The Mitchell Treaty Tunnels are two 23 kilometre long tunnels that are planned to connect the eastern and western portions of the KSM project, of which 12.5 kilometres pass through the Tudor Gold’s Treaty Creek claims.
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“We are confident that the Province has acted within the law and that the various authorizations for the MTT are appropriate and reliable. This latest action is one of a number of legal challenges Tudor has made over the years opposing our MTT rights. In every instance, the BC government has reconfirmed our approvals and our understanding of the legal aspects of these matters,” commented Rudi Fronk, CEO and Chairman of Seabridge Gold.
From Tudor’s standpoint, the current situation amounts to a misrepresentation by the Province of Tudor’s rights as a mineral claims holder, with additional allegations including that the reserves amount to an expropriation by the province of their mineral claims, and that the province does not have the authority to grant Seabridge the right to use areas within the Treaty Project claims. The expropriation claims specifically references the fact that the Mitchell Treaty Tunnels sterilize the economic benefits of Tudor’s project claims.
As part of the filing, Tudor is seeking a court declaration that states that the conditional mineral reserves do not apply to it or that the authorization for activities on their claims exceed the province’s authority. Alternatively, Tudor is seeking an award of compensation for the expropriation or for damages from misrepresentation.
The filing is said to rely heavily on a statement made by the province of British Columbia in 2012 that stated that the conditional mineral reserve did not apply to the existing holder of the Treaty Project claims. However in Seabridge’s view that comment was superseded in 2014 by additional commentary that stated the amended reserve did apply to the holder of the claims. Seabridge also argues that the claim to property rights is not in line with the Mineral Tenure Act, and highlights that the existing holders of the Treaty Project claims had not challenged the ruling for 11 years, along with the fact that the ruling was in place when Tudor first acquired an interest in the project in 2016.
The action is separate from an appeal of a decision by the Chief Gold Commissioner that Tudor Gold brought forward earlier this year.
“While this Action proceeds, we will continue to advance our current plans for the KSM Project for the benefit of our shareholders, local communities and the First Nations who have so strongly supported our progress,” continued Fronk.
Seabridge Gold last traded at $34.71 on the TSX.
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