ELKO - Queenstake Resources USA attorney Gary DiGrazia said Monday Queenstake should be signing an agreement within a short time to settle the lawsuit former Jerritt Canyon Mine employees filed against the company.
First, Queenstake needs to iron out details with the U.S. Department of Labor over 401(k) issues and that should happen by the end of this week, he said.
The lawyer for the former employees, Travis Gerber, said Monday Queenstake "has assured us they will sign the settlement agreement upon Department of Labor approval, and they are in communication with them as we speak."
Queenstake parent Yukon-Nevada Gold Corp. agreed in March to settle the lawsuit and on April 1 deposited money to cover what is owed 400 employees laid off when Yukon-Nevada abruptly shut down the mine north of Elko in August 2008.
"The exact amount is $2,985,440, but that doesn't include attorney fees. Those have to be deposited by April 15," DiGrazia said.
He said the matter with the DOL has to be resolved and the language in the agreement tweaked to fit whatever is resolved with the department before Queenstake signs.
Queenstake also may need to deposit more money to meet Labor Department requirements, but DiGrazia said this is "not an amount that will cause the agreement to fail," although it could be substantial.
The lawyers and former Jerritt Canyon employees who filed the class-action lawsuit have already signed the settlement agreement.
The five former Queenstake employees who filed the lawsuit in U.S. District Court in Reno - Kurt Knudsen, Donald Capp, Larry Moon, Steve Volkert and Paul Dyer - initially asked for a $5 million lien against Queenstake over the pay issue.
Gerber said former Jerritt Canyon employees have an issue, however, over where Queenstake deposited the settlement money - in an account the company controls. They want to be sure the money is moved to an account that is "no longer controlled by Queenstake."
A third-party administrator will be distributing the money, Gerber said.
DiGrazia said the plaintiffs are working with the Queenstake attorneys to resolve the Labor Department concerns. Anthony Hall of Reno is the lead attorney for Queenstake in the talks with the Labor Department.
Once the attorneys for Queenstake sign the agreement, there will be more steps before the ex-employees receive their money and medical bills that were pending when the mine shut down paid.
"I can't say how long it will take to go through the court process but realistically it will be a couple of months," DiGrazia said.
"As soon as they sign the settlement, we will motion the court to approve the class action settlement, to authorize us to send official notices of class action to employees and the administrator will distribute the funds," Gerber said.
Although Yukon-Nevada shut down Jerritt Canyon in 2008 due to financial difficulties, the Vancouver-based company reopened the mill, and Small Mine Development is contract-mining the Smith underground mine at Jerritt Canyon for Yukon-Nevada.