A dispute between Canada’s Centerra
Gold (TSX:CG) and Premier Gold Mines (TSX:PG) in relation to their joint gold project
in Greenstone, Ontario, is heating up, with Premier filing on
Tuesday a counterclaim in response to its partner’s lawsuit.
The bone of contention is a project
update made in December by Greenstone Gold Mines — Premier’s and
Centerra’s subsidiary AuRico’s company — which Centerra argues should not
be considered a “Feasibility Study.”
Premier claims that in 2016, a comprehensive
technical and economic feasibility study was completed for the Hardrock project,
located in Northwestern Ontario, about 270 km northeast of Thunder Bay.
Upon its completion, the Greenstone
Gold board — consisting of two
members each from Centerra and Premier — approved a series of budgets, including the
2019 budget that gave Greenstone Gold the direction to independently complete a
resource estimate and an economic update on the project.
Premier contends the Greenstone
Gold board met once the 2019 project update, prepared by an independent mining
consultant, was completed.
The Thunder Bay-based miner added
that the feasibility study presented at the time indicated an internal rate of
return that satisfied the criteria under the partnership agreement for the
development of a mine.
The partners are expected to meet
in court in October.
It’s estimated that the open-pit gold mine could provide nearly 1,000 jobs during construction and pre-production, and 450 workers would be employed full-time during Hardrock’s 15-year mine life span.
Between 1930 and 1970, more than 4 million ounces of gold were mined with underground methods from multiple mines in the region, with the Hardrock mines being the largest.