Coeur d’Alene Mines Corporation (NYSE:CDE) (TSX:CDM) today provided an update on recent activities related to a legal dispute between its subsidiary, Coeur Rochester, Inc. and Rye Patch Gold US Inc. and its publicly-traded Canadian parent corporation, Rye Patch Gold Corp. The legal dispute stems from competing asserted interests in certain unpatented mining claims covering federal lands near Coeur’s Rochester mining operations following Coeur Rochester’s inadvertent failure to pay 2011 annual mining claim maintenance fees.
In late December 2011, the Nevada State District Court enjoined Rye Patch Gold US Inc. from entering certain active mine areas at the Rochester operations pending the outcome of a trial scheduled for November 2012. Although Coeur cannot predict the outcome of the trial, it believes its claims are superior to those staked by Rye Patch.
Earlier this year, Rye Patch filed a motion for a preliminary injunction to prevent Coeur Rochester from entering the disputed claims. A hearing on the motion was held in late June before the Special Master, retired U.S. District Judge David W. Hagen, who was appointed by the Court to assist in addressing certain pre-trial matters. In a report dated August 6, 2012, the Special Master issued a recommendation that the Court deny Rye Patch’s motion on the grounds that Rye Patch did not demonstrate a likelihood of success on the merits of the case and did not show that it would suffer irreparable harm if a preliminary injunction were not granted. The Special Master’s report noted that Rye Patch has not demonstrated that it has made a discovery of valuable minerals on any of the disputed claims, which is a critical issue in the case.
In addition, on August 9, 2012, the Court entered orders adopting a number of recommendations made by the Special Master regarding several pending motions, including denying Rye Patch's motion to dismiss Rye Patch Gold Corp., the publicly-traded parent company of Rye Patch Gold US Inc., as a party to the litigation. Rye Patch Gold Corp. must now answer Coeur Rochester’s complaint and respond to discovery requests. The Court also entered an order denying Rye Patch’s motion to revoke the appointment of the Special Master.
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