In light of Lac-Corona suit plan your site visit carefully

A former president of the Prospectors and Developers Association of Canada has some advice, in light of the Hemlo land dispute involving Lac Minerals and International Corona Resources, for someone thinking of visiting another company’s exploration property: do some planning.

“Think out your reasons for the visit and what you want to do with the information,” Lionel Kilburn says, adding that you might also consider discussing your intentions with the other party before making a site visit. “It seems to me, as soon as you put your foot on the property, you’re hooked.”

Kilborn, a former Falconbridge Ltd. employee now in the consulting business, was one of three speakers at a recent Toronto workshop sponsored by the natural resources and energy section of the Canadian Bar Association — Ontario. Topic of the workshop was the effect the legal dispute over the Page Williams gold mine, brought into production by Lac, may be having on mining and mining law.

Corona, which has a 50% interest in the neighboring David Bell mine at Hemlo, challenged Lac over ownership of the Page Williams mine and in March, 1986, was awarded the mine, upon payment of $154 million, in a ruling by the Supreme Court of Ontario. The Ontario Court of Appeal unanimously upheld that ruling in October, 1987, and the case is now before the Supreme Court of Canada.

Corona argued, in part, that Lac had breached a fiduciary relationship and misused confidential information in gaining control of the Williams property; the judge accepted Corona’s side of the argument on both principles in rendering his 1986 judgment. Property visits

Site visits have to continue if new deposits are to be developed, Kilburn said, admitting he has read the court decision several times but remains confused on several points. For example, he said the decision deals with a visitor to a property but the host’s obligations are hardly mentioned.

On one hand, he said, even if all your intentions are declared, are you still in the clear? And, on the other hand, if the parties involved strike no prior agreement but information is exchanged, “does that mean you’re forbidden from doing anything?” he asked.

Karl Harries, a lawyer with Fasken & Calvin and a graduate mining engineer, agreed with Kilburn that a site visit should be planned. He recommended an “explorationist” keep a diary of his or her visit, and if two people visit the site together, then each should write his or her diary independently of the other.

Don’t give your field people permission to sign a letter concerning a site visit, and if you receive an unsolicited invitation to visit a property, return it to the sender immediately, Harries said.

As for “non-deals,” or negotiations which tend to expire solely with the passage of time, Harries suggested always including a cut- off date which could be open to extension.

Third speaker at the workshop was lawyer Mitchell Wine of McCarthy & McCarthy, who worked on the Corona side in the Lac- Corona court case.