After two days of deliberations, a U.S. District Court jury has found the London-based merchant banking firm of Samuel Montagu & Co. did not have a fiduciary relationship with Gold Standard Inc.
Gold Standard filed suit two years ago alleging the banking concern misused confidential information it was given about the Mercur mine for its own profit and to aid Toronto-based American Barrick Resources in acquiring the mining property.Although the 11-member jury in its verdict did indicate that Gold Standard possessed secret information about the Mercur mine, it said that Montagu did not use that information to the injury of the Salt Lake-based company.
The mining company approached Montagu in the spring of 1984 for help in arranging financing for acquisition of 25 percent or more working interest in the Mercur property.
At one point during the monthlong trial, Scott Smith, president of Gold Standard, said he believed the company had established a relationship with the merchant banking concern. He said that John van der Westhuizen, director of Montagu Mining Finance, had requested additional information about the Mercur mine near Tooele.
The mine produces more than 100,000 ounces of gold per year.
Montagu attorneys successfully argued that Gold Standard never had a banking relationship with the London firm.
They said Smith spoke with van der Westhuizen only twice in 1984 and those conversations consisted of two 15-minute phone calls.
They acknowledged that Gold Standard did give information to Montagu, but maintained that the Salt Lake City concern never said the information was confidential and never told Montagu not to give it to anyone else.
They said that when American Barrick purchased the Mercur property in 1985, it did so without Montagu providing any financial help.
Smith said good grounds for an appeal exist.