Two major mining companies in Bulgaria, both with significant foreign participation, appear to be headed for a dispute in court.

On September 24, web-based international mining publication Mineweb.org reported that on July 31 7007, Balkans Gold Limited (BGL) announced that it had received notification that BGL and its subsidiary Thrace Resources EOOD had been joined as defendants to a legal action in a Canadian court by Dundee Precious Metals Inc (DPM) and its subsidiaries against John Menzies and Euromax Resources Ltd, and other companies.

Mineweb.org said that BGL had retained Canadian legal representation and the preliminary advice received was that the company had a strong defence to the action.
Moreover, the Canadian counsel's opinion was that Bulgaria, not Canada, was the appropriate jurisdiction for the hearing of the action.

BGL is defending the legal action. It said that it intended to seek a commercial resolution and was attempting to initiate a discussion with DPM, Mineweb.org reported.
The manager of the Bulgarian unit of DPM Vera Djambazova spoke to The Sofia Echo about the company's allegations against Menzies, who is chairman and CEO of Euromax Resources.

She said at the end of 2002, Menzies was working as a consultant with a Canadian financial group, which at the time was considering an investment in Chelopech mine. Menzies' consultancy contract included a confidentiality clause, she said.

In 2003, the ownership of the company involved in Chelopech, Navan, was sold to DPM. According to Djambazova, basing its decision on the surveys that had been done in the north-eastern part of Chelopech, DPM applied for concession of these territories. Djambazova said Menzies also applied for the concession and the Government awarded the contract to him.

Djambazova alleged that this meant that Menzies had violated the confidentiality clause.

She said that the court action had been lodged under Canadian jurisdiction because the contract between the two parties had been signed in Canada. Djambasova told The Sofia Echo that the case was a "small one" and DPM did not intend to give an official statement on it. No Bulgarian institutions were involved with it.

Euromax external relations head Mariana Grancharova (no relation) told The Sofia Echo that "DPM are well-known for threatening court action against Djevdet Chakurov (Bulgarian Minister of Environment and Water Affairs) and the Government". Menzies declined to comment to The Sofia Echo on the DPM allegations.