RE: Mary March??It's on their website. Any questions just call Harry Hodge. Next week should end the dispute about the claim title.
Pending resolution of title litigation presently before the Supreme Court of Newfoundland and Labrador, Trial Division, Canstar has the option** to earn, from Phelps Dodge Corp., a 50% interest in perhaps the most attractive exploration property in Atlantic Canada, the high grade Mary March zinc-lead-copper-silver-gold prospect in central Newfoundland. The Mary March property is at present fully held by Noranda Exploration Company, from whom Phelps Dodge Corp. earlier negotiated their right to earn a 50% interest in the property.
Located 20 kilometers northeast of, and within the same geological group that hosts the prolific former producing Buchans mine, discovery holes drilled by Phelps Dodge in 1999 and 2000 produced some of the highest grade base and precious metal intersections ever achieved in the Maritimes outside the Buchans camp. The Buchans mine produced 16.2 million tonnes averaging 14.50 per cent Zn, 7.56 per cent Pb, 1.33 per cent Cu, 126 grams per tonne (g/t) Ag and 1.37 g/t Au over its 56-year mine life. By comparison, the discovery holes drilled at Mary March by Phelps ran 10.33% Zn, 118.1g/t Ag, 1.62% Pb, 4.1 g/t Au, 0.66% Cu over 9.23 m; 16.8% Zn, 660 g/t Ag, 12.2 g/t Au, 5.44% Pb, 0.18% Cu over 0.91m; and 3.02% Zn, 1.08% Pb, 72.4 g/t Ag, 0.13% Cu, over 20.6m.
Given these grades, it is perhaps not surprising that title to a crucial portion of the Mary March property is presently being contested in the courts. In September and October 2000, some time after the initial discoveries, a privately held Newfoundland company filed applications with the Mineral Claims Recorder for the Government of Newfoundland and Labrador (“Mineral Claims Recorder”) seeking Map Staking Licences over the core Mary March discovery areas. On the basis of solid evidence demonstrating that the lands in question were not open for staking, these applications were rejected by the Mineral Claims Recorder. On December 20, 2000, the party in question filed a grievance with the Mineral Rights Adjudication Board (“the Board”) asking that the Mineral Claims Recorder’s decision to refuse their applications for Map Staking Licences be overturned. In a surprising ruling handed down December 17, 2003, the Board ruled against the Province and the legitimate title holders. Shortly thereafter, on January 8, 2004, the Province filed an appeal on behalf of the Mineral Claims Recorder before the Supreme Court of Newfoundland and Labrador, Trial Division (“the Court”). Factums have now been submitted by the Appellants and the Court is expected to hear the appeal of the Board’s ruling in the first half of 2005.
Management has received legal advice that the Board was misdirected both in fact and law. The practical result of the Board’s decision, should it stand, would be to render all registered mineral claims in the province of Newfoundland invalid once a grievance is filed.
Management considers Mary March a ‘company maker’ asset and resolving the title dispute a top priority. Management appreciates that the Provincial Government and in particular the Department of Natural Resources, have provided strong support and have mobilized their best people and departmental resources toward a resolution. Nonetheless, as we are anxious to get on with our exploration of the property, with the development of the resource and the employment of local businesses and workers, it remains imperative that the issue be conclusively settled in a timely manner. We believe that our case is strong, and that we will prevail.
**The option agreement with Phelps Dodge Corporation is subject to resolution of the ongoing litigation. Given the uncertainty that this action engenders, management recommends that shareholders view the Mary March property as a non-core ‘special situation’ – not essential to the future direction nor success of the firm, but very much a positive should the Supreme Court rule, as we expect they shall, in our favour.