Mountainstar seeks to extinguish Pascua protocol
2012-07-25 16:43 ET - News Release
Mr. Brent Johnson reports
"BARRICK'S" PASCUA-LAMA PROJECT AND THE BI-NATIONAL TREATY (THE "PASCUA PROTOCOL")
Mountainstar Gold Inc. has learned that mining publication Business News Americas reported on Aug. 12, 2004: "Representatives from the governments of Argentina and Chile will meet in Santiago to sign the mining integration treaty protocol for the Pascua Lama bi-national project, Argentina's mining secretary reported. The protocol will provide the legal framework to begin the gold and silver project, whose construction will require some US$1bn. The document will be signed by Argentina's foreign affairs minister Rafael Bielsa and his Chilean counterpart, Soledad Alvear, together with Argentina's mining secretary Jorge Mayoral. Also present at the ceremony will be provincial authorities, legislators, and Argentine and Chilean businessmen, among others. The Pascua Lama project is owned by Canada's Barrick Gold (NYSE: ABX), which has already greenlighted development of the project on the Chile and Argentina border. The project will have a three-year construction period and will begin operations within 18 months once tax and financing issues are settled, the company said in July."
Mountainstar Gold, the company formerly known as Mountain-West Resources Inc., is currently financing a legal challenge to the bona fides of the Pascua protocol in Chile and seeks, among other things, a court order that the Pascua protocol be extinguished. Without the Pascua protocol, the Pascua Lama project, as currently proposed by Barrick Gold Corp. and its subsidiaries, in the opinion of management, cannot possibly proceed. The basis for this court challenge is that the Pascua protocol was erroneously obtained upon fatally flawed representations and assertions by Barrick, which errors are detailed as follows:
Amarillos 1-3000, a mining concession obtained by Barrick from Lac Minerals in 1994 and included in the Pascua protocol, is a non-metallic (salts and nitrates only) concession according to Sernatgeomin (Chile's Geological Authority) and as such, cannot rationally support a gold and silver project.
Amarillos 1-3000 is in the process of Mining Registry cancellation in the courts at Vallenar, Chile, owing to a long-outstanding superpositioning flaw (per the Chilean Mining Code).
Barrick, which claims to own Tesoros Uno 1 to 30 to Tesoros Doce 1 to 5 concessions and which concessions are also included in the Pascua protocol, has admitted to the court at Vallenar, Chile, that it does not possess any documents of ownership of Tesoros, nor does it possess any valid legal rights in Chile to allow the exploitation of the Tesoros concessions. Accordingly, in the opinion of management, Barrick must cease claims of ownership or legal control over the Tesoros claims or, potentially face serious consequences in Chile, where such transgressions are taken very seriously by the courts.
The Tesoros concessions have been subject to a court-ordered injunction since 2001 which prohibits, among other things, contracting with, encumbering or otherwise commercially exploiting the Tesoros concessions pending the outcome of a court action in Santiago, Chile (case No. C-1912-2001). In the opinion of management, the Tesoros concessions, having also been included in Barrick's Pascua protocol, should never have been claimed to have been owned by Barrick, as these concessions have never been legally owned or controlled by Barrick, in accordance with Chilean law.
MSX's joint venture partner, Jorge Lopehandia, owns unencumbered title (certified domain) to the Amarillo Norte and Amarillo Sur concessions (restituted Amarillo), over the Mina Pascua Chile areas of geological interest. These concessions are positioned superimposed over the Tesoros areas, which Barrick's own lawyer Gonzalo Nieto identified, in 2010 court proceedings in the 14th Civil Court of Santiago, Chile (case No. C-1912-2001), as possessing the greatest geological interest for the Pascua Lama project.
These restituted Amarillo concessions are described in the option agreement between the company and Mr. Lopehandia.
We seek Safe Harbor.
AI
