This week WMC Resources announced it’s evaluating the potential of a nickel-copper prospect with inferred resources located some 165km south of Val d’Or in Canada. WMC is negotiating with small Canadian explorer, Matamec. One hopes that this Canadian adventure is more successful than WMC’s disastrous Nova Scotian deal almost two decades ago and which is still before the courts today.

The Seabright case is complex but boils down to this – WMC acquired a mine in Nova Scotia from Seabright and it turned out not be as good as WMC had hoped. WMC then went after Coughlan and the other directors of Seabright with vengeance, claiming misrepresentation and fraud. As Justice Cromwell of the Nova Scotia Court of Appeal found in 2003:

Westminer’s [WMC} investment in Seabright quickly proved to be an embarrassing disaster. Seabright’s gold mines were not viable. Westminer’s reaction to this unhappy discovery was both prompt and vigorous. It complained about Mr Coughlan to the Ontario Securities Commission, started a lawsuit in Ontario against the former directors of Seabright, including, of course, Mr Coughlan, and made a public announcement concerning the suit. The suit alleged dishonesty and securities law violations on the part of Mr Coughlan and the other Seabright directors: fraud, civil conspiracy, failure to disclose material changes and insider trading. The gist of the action (known as the Ontario action) was that the former Seabright directors had known that the Seabright mines were of dubious potential and had failed to disclose this to Westminer at the time of its takeover of Seabright. The action directly challenged the honesty and integrity of Mr Coughlan and the other Seabright directors. (In the end, Westminer’s Ontario action did not proceed and Mr Coughlan and the other former directors successfully sued Westminer in Nova Scotia for various claims, including civil conspiracy to injure. Mr Coughlan and the former Seabright directors are not parties to the present action.)

The behaviour of the WMC team was “vengeful” according to Justice Cromwell. Presumably, with a number of those who were involved in the Seabright debacle having departed WMC, negotiations with Matamec Exploration over its nickel-copper deposit will not turn out so ugly.