Junior graphite explorer Canada Carbon (TSXV:CCB) received two favorable court decisions on its US$96-million lawsuit against the council of Grenville-sur-la-Rouge, the company announced on Monday (April 9).
Last year, the council rezoned the area targeted for mining as agricultural, claiming mining would harm the environment and hurt the local agricultural and tourism industry.
Following this decision, the Commision for the Protection of Agricultural Land ruled that Canada Carbon’s Miller project was not compatible with municipal bylaws and said it was closing its file.
As a result, the company decided to file a US$96-million judicial review against the town for blocking the development of its graphite mine.
In a statement in response to the lawsuit, Mayor Tom Arnold and the municipal council said their “duty and legal obligations are to protect the interests and rights of their citizens.”
Canada Carbon’s project has been in development since 2013 and should create at least 50 jobs in the next decade. Miller is a past graphite and mica producer that was worked around 1845.
According to the company, filing a lawsuit was not its initial plan. “We believe in a sound social acceptability process that can be obtained only by engaging in constructive dialogue with all stakeholders,” said Bruce Duncan, CEO of Canada Carbon.
As part of the legal process, both sides were summoned to court for the first time on March 29 in order to determine a schedule for legal proceedings.
The counsel for Grenville-sur-la-Rouge presented a motion to have the judicial review dismissed on the basis that Canada Carbon’s legal filings were abusive. The US$96-million lawsuit is nearly 20 times the town’s annual budget, which is set at US$5.5 million.
However, the court found that the municipality’s demand was unfounded in law and refused to include it in the court’s schedule of deadlines.
Additionally, the counsel for Grenville-sur-la-Rouge asked the court for the town to be entitled to carry out a hydrogeological assessment for Miller in the context of this case. The court also refused this request.
Aside from Miller, Canada Carbon owns another two graphite properties in Quebec, the past-producing Asbury mine, located north of the Ottawa-Gatineau area, and the historic deposit Dun Raven in Thorne.
On Tuesday (April 10), shares of Canada Carbon were trading flat in Toronto at C$0.14. The company’s share price has been on an uptrend since January, and is up almost 69 percent year-to-date.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Canada Carbon is a client of the Investing News Network. This article is not paid-for content.