A little perspectiveI'm not sure if many here are blowing this way out of proportion or underestimating its potential consequence. The lawsuit is over the voting arrangement that Shore struck with Cameco and UEM. No one's disputing anything more. So DB doesn't like something about Shore's proposed work program for 06 - for reasons unknown. Maybe it's too ambitious/expensive for DB's liking. Maybe it's focussing on proving up resources adjacent to the Star, which would give Shore a disproportionate benefit from the program, with DB nonetheless picking up half the tab. Or maybe DB sincerely doesn't think FALC is worth the kind of short term investment Shore is proposing, but isn't ready to walk away either. We don't know. I don't think DB really has to disclose what it disagrees with; they're disputing the voting block on a legality, and their motive for doing so is irrelevent.
I don't think this legal challenge in and of itself is that big a deal. Nor do I think DB has tipped its hand as to its evaluation of the FALC, contrary to what I somewhat breathlessly posted earlier.
Anyway, I'm not a lawyer, but DB may have a point in law in that it is operator of the JV with the rights and privileges that entails. Now Shore has unilaterally nullified that role by buying the majority vote in the JV. Any lawyers on the board?
But even if DB is successful, what does it hope to gain? Whether or not the Oct. 31 arrangement withstands a legal challenge, Cameco and UEM are free and probably likely to vote with Shore again.
It's on the last point I think this could get ugly, and bring FALC exploration to a standstill for some time. Even if DB is successful, given the other JV partners' predisposition to vote as a block, how can DB resume its role as operator? Good faith and all that. I think legal minds could wrestle with that for some time, which perhaps is exactly what DB wants. So if you're Shore, Cameco and UEM, what do you do? Hold things up indefinitely or work out a compromise? Probably the latter, in which case DB in effect has leveraged control back from the other JV partners. And SGF is out $10 million.
One thing that has to weigh on DB's collective minds is that should they delay further exploration on the FALC, costing the other partners (including you and me) money, and lose, what sort of liability are they accumulating?
Someone mentioned earlier that DB blinked. I think the showdown has just begun and we have yet to see who blinks. It's definitely proving to be a high stakes game. Great sport, what?