Rick Howes's Reunion Gold Corp. (RGD) rose one cent to 45.5 cents on 8.83 million shares on word it has reached a "mutually acceptable" settlement with Barrick Gold Corp. (ABX: $23.75) regarding a claim Barrick brought early this year. In mid-February, Mr. Howes, Reunion's president and chief executive officer, revealed that his company was named in a suit filed by Barrick that stemmed from Reunion terminating a strategic alliance agreement with Barrick at the end of 2022.
In its suit, Barrick claimed that the agreement, which by then pertained only to the NW Extension project in Suriname, should continue in perpetuity. Accordingly, Barrick was demanding declarations affirming its position, orders compelling Reunion "perform its obligations" and various damages and injunctive relief measures. Not so, retorted Reunion -- or when expressed in native lawyerese -- "the claim is without merit and [Reunion] intends to vigorously defend against it."
Perhaps the lawyerly vigour paid off, as today's settlement has the two companies agreeing that the strategic alliance has been terminated, the parties have no outstanding obligations under the now terminated agreement and there are no properties subject to the agreement -- if there were one, that is.
The end appears logical, as the most recent work at NW Extension -- drilling in early 2022 -- yielded disappointment. As a result, Reunion decided not to pursue its option to acquire a 100-per-cent interest in the project and offered to return it to Barrick free of charge. (Therein lies the eyebrow raiser, as the property, adjacent to a nature reserve and bird sanctuary, carried "serious risk of negative environmental impact." Perhaps Barrick was skeptical of Reunion's demobilization and rehabilitation work, but either way the dispute has lawyered its way to a slow death.)