Frank Callaghan, the colourful and controversial Vancouver mine promoter, is being sued by Barkerville Gold Mines Ltd. (TSX:BGM), the company he founded, for allegedly colluding with a contractor who had confidential information belonging to Barkerville to stake a claim next to Barkerville’s properties.
In a suit filed in BC Supreme Court, Barkerville alleges Callaghan colluded with Angelique Justason of Tenorex Geoservices to stake the claim using proprietary information from a technical report that Barkerville had commissioned before Callaghan was forced to resign in 2014.
The allegations have not been proven in court. Callaghan has not responded to a request for comment.
According to the lawsuit, Barkerville had done business with Justason, the sole proprietor of Tenorex Geoservices.
Callaghan was forced to resign from Barkerville in 2014, after the company’s shares were halted and a BC Securities Commission (BCSC) launched an investigation into claims Callaghan had made about Barkerville’s reserves, which proved to be unsubstantiated by a technical report.
One year after Callaghan resigned, Barkerville terminated its contract with Tenorex and then discovered that the contractor had failed to submit a technical report that Barkerville had commissioned.
According to court documents, Barkerville says there is a clause in the agreement that the contractor is obliged to destroy all confidential information once the technical report is done and paid for.
When Barkerville contacted Justason, the company claims she promised to provide the technical report, but as of October 16, the company said she has failed to do so.
Barkerville claims the technical report contains proprietary information, including rock samples locations and gold assays.
In the meantime, in May 2016, Barkerville alleges Justason staked a claim that falls “within the geographic scope” of Barkerville’s property.
“Callaghan collaborated with Justason in connection with the identification and acquisition of the mineral tenure,” Bakerville states in its claim. “It was and is their intention to share any benefits accruing on account of the mineral tenure.”
In late June or early July 2017, Barkerville became aware that Justason had staked a mineral claim and wrote her to demand that she relinquish the claim to Barkerville.
Justason responded stating that Barkerville still owed her $12,101.25, and that she was therefore not in breach of any duty owed to Barkerville as part of her contract with the company.
Barkerville alleges Justason then transferred the ownershjip of the claim to Callaghan, who then offer to sell the claim to Barkerville.
Barkerville is asking the court for an order forcing Callaghan and Justason to relinquish the claim and turn over all confidential information it gathered as part of its contract with Barkerville.
In the alternative, the company is seeking $2.5 million in damages and $250,000 in punitive damages.
Barkerville is one of a handful of mining companies that Callaghan founded, but is the only one that had any real promise of becoming an operating gold mine.
Over the years, Callaghan had managed to consolidate a number of claims to form a large district with a number of deposits with gold mining potential.
The company faced a serious confidence crisis between 2012 and 2013, when the BCSC halted trading in Barkverville’s shares for more than a year, while Barkerville commissioned a new technical report.
That new report confirmed that Callaghan’s claims about the estimated reserves for a deposit called Cow Mountain were not substantiated by an earlier technical report.
Callaghan resigned as CEO and later as director in 2014, and he later agreed to pay a $30,000 penalty, which brought a BCSC investigation to an end.
