stockwatch.com Copper Mountain settles $1.8M suit over milling balls
2024-01-30 21:08 ET - Street Wire
by Mike Caswell
Copper Mountain Mine (BC) Ltd. has reached an out-of-court deal to settle a $1.8-million lawsuit filed in the Supreme Court of British Columbia over hundreds of tonnes of balls used in the company's milling process. According to the suit, Copper Mountain failed to pay for the balls, leaving the supplier to seek court orders that included a lien over the mine. For its part, Copper Mountain said that the balls were defective, leading to damage in the mill and lost production.
The end of the case is contained in a consent order filed at the Vancouver courthouse on Monday, Jan. 29. The order states that the plaintiff, Moly-cop Canada, has agreed to drop the lawsuit on terms that will include the receipt of $1.8-million. The money was previously paid into the court as part of a garnishing order against Copper Mountain.
Monday's settlement concludes a case that is less than a year old, Moly-cop having filed a notice of claim over the money on May 12, 2023. According to the suit, Moly-cop had been a regular supplier of balls to the Copper Mountain mine going back to October, 2020. It provided balls (described as being 5-1/2 inches in size) from its yard in Kamloops, with Copper Mountain having the right to inspect the balls and refuse any that appeared to be non-conforming, according to the suit. Copper Mountain had 30 days after delivery to make any claim for defect, Moly-cop said.
The problem, as set out in the suit, arose in November, 2022, when Copper Mountain stopped paying for the balls. By Jan. 11, 2023, the amount owing had grown to $1.8-million, leading to Moly-cop terminating its agreement with Copper Mountain. According to the suit, Copper Mountain had not made any complaints about the product -- it simply stopped paying the invoices.
For its part, Copper Mountain denied that it owed Moly-cop anything, and said that there were problems with the balls. In its response to the lawsuit, filed on June 30, 2023, Copper Mountain claimed that the product it received led to damage and other problems with its milling operation. It claimed to have received over 900 tonnes of product that was defective, starting in June, 2022. The balls suffered from a high number of "scats," or broken fragments of ball, which damaged belt magnets in the mill, Copper Mountain claimed.
Copper Mountain said that it promptly notified Moly-cop of the problem, and Moly-cop agreed to provide a soft, impact resistant ball, starting in September, 2023. This product had less breakage, but in the end it performed "materially worse" than the prior balls, according to Copper Mountain. The company said that further investigation revealed the product to be visually defective in terms of shape, surface damage and cracking.
As part of its response, Copper Mountain filed a counterclaim in which it had sought damages for the defective product as well as damage to its mill. It said that it had spent $1.54-million on the defective balls and $20,971 fixing the mill. With Monday's settlement, Copper Mountain has abandoned that counterclaim.
Vancouver lawyer Cobi Dayan of Miller Thomson LLP represented Moly-cop. Erica Miller of Farris LLP represented Copper Mountain Mine (BC) Ltd., a partly owned subsidiary of Copper Mountain Mining Corp. The company no longer trades, with Hudbay Minerals Inc. having acquired it on June 20, 2023.