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Gowest settles dispute with PGB Timmins over Bradshaw gold deposit

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Gowest settles dispute with PGB Timmins over Bradshaw gold deposit

Gowest Gold Ltd. reached a settlement with PGB Timmins Holdings LP over a dispute on the Bradshaw gold deposit, part of the North Timmins gold project in Ontario.

In early August, PGB Timmins terminated a 2016 prepaid forward gold purchase agreement and demanded an early termination fee of US$25.5 million after accusing Gowest of certain defaults. Gowest disputed the PGB's calculation of the fee and its attempt to enforce security.

Under the settlement, Gowest said Aug. 19 that PGB Timmins agreed to withdraw the termination notice, which may be reissued if Gowest fails to pay US$9 million and 3,500 ounces of gold from Bradshaw.

In a related agreement, Gowest entered a memorandum of understanding with a third-party investor to acquire PGB's rights under the gold purchase agreement for consideration that would be enough for Gowest to fund the settlement amount.

In April, Gowest allowed Chinese investment firm Fortune Future Holdings Ltd. to increase its company interest to 43.3% through a C$8 million private placement after flagging the difficult market conditions for junior miners.