Claim to Unravel Bad Gold-for-Uranium Trade

     (CN) – A company wants $750 million for trading valuable gold rights for a uranium project that was ultimately shuttered by the Inuit government.
     NWG Investments says it was an attractive partner because it held 86 percent of the controlling shares of NewWest Gold, a company with valuable rights to gold-mining projects in Nevada.
     Fronteer Gold, which is now known as Newmont Mining, and its CEO Mark O’Dea allegedly wanted those rights and lied to get them.
     “They did not care,” NWG says in New York County Supreme Court. “They wanted the gold rights – they needed the gold rights – because they knew their uranium holdings were in grave risk. Rather than say so, they told plaintiff the opposite.”
     Fronteer allegedly acquired the rights to uranium mining projects in the Central Mineral Belt of Labrador, Canada, in 2003.
     Hoping to swap those rights for NWG’s gold rights, O’Dea made a series of misrepresentations to NWG in 2007, according to the complaint.
     “Among other things, he told plaintiff that, unlike other competing uranium companies, the company faced no environmental obstacles to mining, that his company was in a position to begin the mining by 2013, that this start date was ‘firm,’ and that no obstacles stood in its way,” the complaint states.
     In truth, however, Fronteer allegedly “faced grave environmental problems and fierce local opposition to the mining of uranium, making the chances of the proposed start date remote, not ‘firm.'”
     Weeks after they swapped rights, the Nunatsiavut Government, which comprises five indigenous communities and who was given surface rights over the land, announced plans to impose a moratorium on uranium mining, “substantially diminishing the value of the uranium rights,” the lawsuit states.
     NWG says Fronteer concealed the fact that a nearby Canadian nickel and copper mine had spilled tailings into the local rivers just one year earlier. This leak allegedly turned “the local population … into ardent opponents of mining of any sort.”
     Fronteer and O’Dea knew this when brokering the deal, NWG says.
     NWG wants its gold rights back or damages for fraud in the alternative.
     It is represented by Gerard Harper with Paul, Weiss, Rifkind, Wharton & Garrison.

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