Posted: ’11-APR-04 22:00′ GMT – – Archive

Toronto quoted IMA Exploration [IMR] has finally responded to compatriot Aquiline Resources’s [AQI] allegations that it made the Navidad Hill, Argentina discovery using confidential data. Aquiline filed suit in Canada this March to establish a constructive trust over Navidad Hill, drawing on the Lac Minerals and International Corona Resources precedent.

In a ‘Statement of Defence’ filed with the Supreme Court of British Columbia, IMA admits that it used data provided to it in the course of a due diligence investigation of Newmont’s Calcatreu property to stake Navidad Hill. However, IMA says the data was never confidential; it covered ground far outside the zone of influence described in the Calcatreu confidentiality agreement; and the former owners never ascribed any value to it and were in fact aware of IMA’s regional exploration efforts.

IMA has also accused Aquiline of modifying its transaction with Newmont subsequent to the announcement of the Navidad Hill discovery in an effort to manufacture a claim on the property. IMA contends that Aquiline was initially pursuing an asset purchase, but changed this to a purchase of all the shares of the Newmont subsidiary when it became obvious that Navidad was valuable. Indeed, IMA goes further and virtually accuses Aquiline of extortion for pressing claims in an effort to “extract an unreasonable payment or settlement.”

Surprisingly, IMA did not institute a counter-claim in its statement of defence although it has asked for the case to be dismissed with special costs to its account because Aquiline’s actions have been “highhanded, unreasonable and prejudicial to IMA.”

Finding Navidad

The robust defence is potentially marred by IMA’s public statements about finding Navidad when a company geologist happened upon a mineralised outcrop having strolled up a fence line after stopping along a rural road. Joseph Grosso, IMA president and chief executive, told Mineweb that it is easily understood in view of a full presentation of the facts and he pledges to be as candid in court as the company was in its Statement of Defence.

Grosso said: “People don’t seem to understand the degree of other information components. The [data] wasn’t so revealing. . . we were in the process of using all historic data to continue with an exploration recommendation programme that was established six and a half months prior to us even hearing of Calcatreu.”

He credits Dr Paul Lhotka’s analytical methodology for the Navidad discovery; having injected the Calcatreu related regional data into a much larger exploration approach. Grosso says that half a year before getting involved with Calcatreu, Lhotka “made a strong recommendation that put us squarely onto the Navidad property.”

In subsequent interaction between company geologists, Grosso says it was abundantly clear to Calcatreu staff that IMA was active in the Navidad region and excited about a prospective discovery.

Clearly, one of Aquiline’s earliest attacks will be to show that the data IMA received made Navidad an obvious target. Then it will have to explain why, if Navidad was so obvious, the previous owners never followed up with success.

Not confidential

IMA says that in November 2002 a Newmont geologist at Calcatreu provided it with data from bulk leach extractable gold (BLEG) sampling on a non-confidential basis. “At no material time did Minera (the Newmont subsidiary Aquiline bought), Normandy or Newmont take any precautions to establish the alleged confidentiality of the data or notify those who had copies of the data that its use and dissemination were restricted,” the statement reads.

IMA also contends that without a specific confidentiality agreement covering the BLEG data and given that the data was well outside the agreed zone of influence of 2 kilometers, it was free to use the data as it saw fit.

Consequently, IMA denies that Minera never really owned the BLEG data that it used to help pinpoint Navidad.

IMA says the previous owners had followed up the BLEG results “in the immediate vacinity of Navidad”, but found nothing of interest. Having scratched the Navidad region from the list of targets, IMA says Minera employees, contractors and consultants disclosed and disseminated the BLEG data without any confidentiality restrictions. In fact, IMA claims the data was also available to it from third parties because it had become of negligible value to Minera.

The most damaging issue for Aquiline’s case is IMA’s assertion that a Minera employee provided the company with a digital copy of the BLEG data and “expressly acknowledged that the data did not pertain to the Calcatreu Project and was not covered by the Confidentiality Agreement.”

If the confidentiality strategy fails, IMA next line of defence is to have Aquiline’s demand for a constructive trust rendered useless by domicile issues. IMA says that if it did breach the Confidentiality Agreement, then Colorado laws (Newmont’s headquarters) must prevail and they disallow a constructive trust. If the data was confidential in another manner, then Argentinean law applies and it also has no room for constructive trusts.
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