Valterra claims fairly deleted, says gold commissioner

2013-01-02 14:05 ET - Street Wire

by Mike Caswell

Chief gold commissioner Ed Collazzi says he did nothing improper when he deleted a claim block staked by Valterra Resource Corp. in July, 2012. Mr. Collazzi, who is responding to a court case launched by Valterra in the Supreme Court of British Columbia, says he had discretion to delete the claims. This was because he had granted the previous owner of the ground more time to pay fees necessary to keep the property.

The dispute centres around a group of claims that Valterra staked in July, 2012. The company acquired ground that had come open after the previous owner failed to pay cash in lieu of exploration on time. According to Valterra, the Mineral Titles Online system showed that the ground was open and available to acquire before the company began staking. (In B.C., as with most jurisdictions, holders of mining claims are required to either perform exploration or pay cash in lieu of exploration on an annual basis to maintain their claims. Those failing to meet the requirements will automatically lose their ground, barring an intervention by the gold commissioner.)

Problems arose soon after the staking. The company and two other men who had acquired ground at the same time received e-mails from the government stating that their claims were being deleted. The explanation was that there had been an "application error" that had caused the unintended forfeiture of prior claims.

Valterra and the two men, David Walter Johnston and John Donald Graham, did not accept the explanation, and they launched a court case to seek title to the ground. In a petition filed on Oct. 16, 2012, they said there were problems with the government's explanation for deleting the claims.

They acknowledged that there was an issue that prevented people from making payments through Mineral Titles Online around the time they did their staking. That problem would have kept the previous owner of the claims, who the petition identified as Ruth Carter, from paying the cash in lieu of exploration on-line. Ms. Carter could, however, have phoned in a payment, Valterra said. That is how the company and the two men paid for their staking, the petition stated.

Valterra and the two men sought the reinstatement of their deleted claims. Salim Hirji of Fraser Milner Casgrain LLP filed the petition on their behalf.

Commissioner's discretion

Mr. Collazzi, in a response to the petition filed on Dec. 19, 2012, asks that the court uphold his decision to delete the claims. He acknowledges that Ms. Carter was late in paying her cash in lieu of exploration, but he says it was entirely within his discretion to grant her more time to come up with the money.

According to the response, the payment problems with Mineral Titles Online struck just before Ms. Carter's claims expired, on Saturday, July 7, 2012. The claims automatically expired at midnight that day. Ms. Carter subsequently contacted the office of the chief gold commissioner and asked that her claims be reinstated. She explained that she had spent a significant amount of money to maintain the ground since 2006.

Mr. Collazzi says he granted her until July 20, 2012, to make the required payments, a deadline that she met. Her claims have remained in good standing since that date. As he sees it, there is no good reason for the court to interfere with his decision, as the Mineral Tenure Act grants him the authority to grant such an extension.

Government lawyer Karen Horsman filed the response on behalf of Mr. Collazzi. The matter has not yet been set for trial.

Valterra, a thin trader, was last at 16 cents.