The Australian mining company which earlier this year took over east-coast gold producer Seabright Resources is suing the former directors of the Canadian company for $60 million(C).
Western Mining, through its Canadian subsidiaries Westminer (Canada) Holdings and Westminer (Canada), has launched a suit in the Supreme Court of Ontario alleging the former directors of Seabright failed to maintain the company’s public record as required by law.
Seabright was operating two gold mines in Nova Scotia, the Beaver Dam and Forest Hill, at the time the Australian firm purchased all of Seabright’s outstanding shares. The deal, worth $92 million, was completed in February.
Operations at both mines are reported to be below original expectations. A combined output of 45,000 oz gold was projected for 1988; production during the first quarter of this year reportedly totalled 2,380 oz.
According to Western Mining, its bid for the company was based on the public record filed with the Ontario Securities Commission by Seabright, that record containing the admission the Beaver Dam property has “substantial proven resources of gold ore which could be probably mined.”
Western Mining alleges Seabright was advised last December as to the doubtful economic potential of the property, and had Western Mining known of this advice, it says it would not have proceeded with its takeover bid.
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