Vancouver-based junior mining company Crowflight Minerals Inc. (TSX: CML) announced today the company is being sued by its former mining contractor, Dumas Contracting Ltd, for $7.1 million.
“We haven’t been paid,” said Dumas COO Andy Fearn, confirming the claim is now before the Manitoba courts.
Fearn said Dumas provided mining construction services to Crowflight since 2007 at the company’s Bucko Lake Nickel Mine near Wabowden, Manitoba, but is no longer doing business with the company.
According to a Crowflight news release, Dumas has also placed a lien on the Bucko Mine.
“The Company will defend the claim because [a] significant amount of the claim is in dispute,” Crowflight said in the release. “While pending a judicial resolution or settlement of the matter, all of the amounts claimed have been or will be accrued and disclosed on the company’s financial statements.”
The release also noted that Crowflight is currently seeking additional financing “in order [to] bring all valid payables current.”
Calls to Crowflight were not returned by press time.
At press time, Crowflight’s stock had dropped by 7.7 % to $0.06. The stock has been trending downward since April 6, when it hit a 52-week high of $0.25.
In early October, Crowflight announced it was temporarily suspending production at Bucko, and it would be introducing its own underground mining equipment and team. Later that month, the company announced the sudden death of Steven Davies, who had been COO and vice president, operations.
Last month, Crowflight announced management changes, including the appointment of new CFO and corporate secretary Derek Liu plus four new board members, following the resignations of four previous board members.