TSX- and NYSE-listed Seabridge Gold has reported that exploration and development company Tudor Gold Corp has filed a lawsuit against the province of British Columbia.

The case was launched in the Supreme Court of British Columbia (BC) on October 3 and centres on the legal effect of a conditional mineral reserve linked to Seabridge’s copper, gold, silver and molybdenum Kerr–Sulphurets–Mitchell (KSM) project.

The reserve requires Tudor, which owns mineral claims at Treaty Creek, neighbouring Seabridge’s KSM project, not to “obstruct, endanger or interfere with the construction, operation or maintenance of” the Mitchell Treaty Tunnels (MTT), two planned 23 km tunnels that would connect the east and west sides of the KSM mine site.

About 12.5 km of the tunnels would pass through mineral claims held by Tudor at Treaty Creek.

In its lawsuit, Tudor argues that the province misrepresented its rights as a mineral claims holder and that the reserve amounts to an expropriation of its claims, eliminating any potential economic benefit from them. The company also claims the province lacked the authority to give Seabridge rights to use parts of the Treaty Creek claims.

Tudor is asking the court to declare that the reserve does not apply to it, or alternatively, that the reserve and related approvals exceed the province’s authority. If the court does not grant this, Tudor is seeking compensation for expropriation or damages for misrepresentation.

This action is separate from an earlier appeal Tudor filed against a decision by Chief Gold Commissioner Donna Myketa, which Seabridge disclosed on July 14.

A key part of Tudor’s case is a 2012 provincial statement suggesting the reserve did not apply to the then holder of the Treaty Creek claims. However, in 2014 the province amended the reserve and clarified that it did apply to existing holders.

Seabridge argues that Tudor has not challenged the reserve in the 11 years since the amendment, despite acquiring its interest in the Treaty Creek claims in 2016. The company also notes that Tudor’s reliance on “property rights” is inconsistent with the Mineral Tenure Act.

“We are confident that the province has acted within the law and that the various authorisations for the MTT are appropriate and reliable. This latest action is one of a number of legal challenges Tudor has made over the years opposing our MTT rights.”

“In every instance, the BC government has reconfirmed our approvals and our understanding of the legal aspects of these matters. If Tudor were to be successful in certain of its claims, it could have consequences for the KSM project.

“While this action proceeds, we will continue to advance our current plans for the KSM project for the benefit of our shareholders, local communities and the First Nations who have so strongly supported our progress,” Seabridge chairperson and CEO Rudi Fronk said.