Shares outstanding: 267 Million
Symbol & Exchange: BN-TSXV
MONTREAL, Jan. 31 /CNW Telbec/ - Blue Note Mining Inc. was recently
served with a motion by the Fern Trust, an off-shore Guernsey entity, claiming
"anticipatory damages" caused by Blue Note Mining's alleged repudiation of its
claim of an alleged 10% net profit royalty ("NPI"). Fern Trust claims that
Blue Note repudiated their claim on December 7, 2006.
Blue Note has communicated with the Fern Trust, both verbally and in
writing, on several occasions stating that it has not repudiated any claim of
the alleged NPI by Fern Trust. Blue Note is only seeking the minimal
documentary evidence that any reasonable business person, and especially a
publicly-traded company, would expect.
"After all, where a party alleges it has rights to a 10% NPI under a
17-year-old unsigned, unexecuted and unregistered document, one would be
remiss in simply acquiescing," declared John Mavridis, Vice-President
Corporate and Legal Affairs of Blue Note. He also confirmed that to date Fern
Trust has not provided Blue Note with any of this documentation, and none was
filed with Fern Trust's Action.
Blue Note has advised Fern Trust that it cannot evaluate Fern Trust's
claim without receiving the requested supporting documents. In response,
counsel for Fern Trust has taken the position that the demand of evidentiary
documents to their claim is to repudiate the obligations the documents
From various unsigned documents provided by Fern Trust, the alleged 10%
NPI is arrived upon by taking the revenue generated at the Caribou Mine and
deducting all operating, administration, depreciation, amortization and
interest costs, including all costs incurred in prior years for the
development of the Caribou Mine. According to this formula, management of Blue
Note estimates that even if the NPI is ever proven to be a validly existing
claim, any payments would only become due beyond a 5 year period. Based on the
43-101 Micon report's life of mine model on the Caribou Mine, there would be
no pay-out under this alleged NPI.
The "anticipatory damages" sought by Fern Trust are in the amount of
$40 million and are claimed to be due to the alleged repudiation of their NPI
by Blue Note on the basis as set out above.
In the opinion of Blue Note's counsel, the allegation of repudiation is
entirely unfounded in law and in fact. Blue Note has instructed its counsel to
vigorously contest the claim and take all other appropriate action.
Blue Note considers the claim of Fern Trust to be frivolous and without
foundation. Blue Note does not consider the claim of Fern Trust to be
As previously announced, Blue Note has filed, prior to the claim for
anticipatory damages by Fern Trust, an Application for a Declaratory Judgement
and is seeking a determination of:
1. Whether the alleged NPI was agreed to;
2. Whether the alleged NPI binds Blue Note;
3. Whether the alleged NPI otherwise binds Blue Note, as a successor in
title to the original grantor;
4. Whether the claimant has demonstrated that it is the proper successor
to the original grantee of the NPI;
5. Whether Blue Note, in requesting documents sufficient to verify the
claim of the NPI has repudiated any obligation it has to the
6. Such further and other direction as the court deems just.
Blue Note Mining is a mineral exploration and mine development company
with properties in New Brunswick. The company's shares trade on the TSX
Venture Exchange under the symbol BN.
This news release contains discussion of items that may constitute
forward-looking statements within the meaning of securities laws that involve
risks and uncertainties. Although the company believes the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, it can give no assurances that its expectations will be achieved.
Factors that could cause actual results to differ materially from expectations
include the effects of general economic conditions, actions by government
authorities, uncertainties associated with contract negotiations, additional
financing requirements, market acceptance of the Company's products and
competitive pressures. These factors and others are more fully discussed in
Company filings with Canadian securities regulatory authorities.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this news release.
For further information:
For further information: Lorne Woods, Vice President, Investor
Relations, Blue Note Mining, 800-937-3095, firstname.lastname@example.org,