McFinley, contractor settle dispute over Bateman project

Toronto-based McFinley Red Lake Mines (TSE) has removed a major legal impediment to any future development of the company’s Bateman Twp. gold project near Red Lake, Ont. McFinley President William Cummins says he has reached an out-of-court settlement with contractor Dominion Bridge over a dispute relating to the

Since 1988, the two sides have argued over costs associated with the $2.3-million treatment facility that contained an over-rotating ball mill when construction was completed. McFinley said the faulty mill prevented it from completing a 15,000-ton bulk sample which is needed to determined the project’s economic viability.

In the fall of 1988, Dominion Bridge filed a lien on the property that McFinley says has prevented it from arranging financing for the project or attracting a joint venture partner.

But after a series of recent meetings, a settlement has been reached allowing McFinley nine months to find a partner and a further nine months to pay Dominion $1.8 million plus interest accruing from Dec. 12.

As part of the settlement, the two parties have agreed to settle all other litigation.

Before the dispute, McFinley had outlined preliminary reserves of 890,000 tons grading 0.21 oz. gold per ton within the same formational horizon that hosts the nearby Campbell and Dickenson gold mines. The orebody is accessible by a 400-ft. shaft and development workings on three levels.

However, if McFinley succeeds in attracting a major, the joint venture must contend with gold mineralization that is known to be erratic and a shaft that may have to be extended considerably.

But Cummins says the underground workings are still being pumped out and underground exploration work could begin as soon as financing is available.