North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Vancouver-based Novagold Resources has upped the ante in its battle against a lawsuit from another Vancouver junior mining company, Pioneer Metals.

NovaGold announced a takeover bid for Pioneer in mid-June, offering to purchase 100 percent of Pioneer's shares for C$0.57 per share in cash. The dispute centers around NovaGold's Galore Creek project in northwestern British Columbia, where the company is considering locating a tailings facility on Pioneer's Grace property.

Pioneer filed a lawsuit against NovaGold last October, alleging that NovaGold breached its obligations to explore the Grace property, which it had optioned.

In March, Pioneer informed NovaGold that it would not be permitted access to the Grace property for any purpose, including condemnation drilling.

"Pioneer will not tolerate any unlawful trespass on our land," said Pioneer's president and CEO, Stephen Sorensen. "I have instructed our legal counsel to take steps to ensure that the Grace property is not subject to any improper trespass."

NovaGold's offer represents a 30 percent premium to the one-month weighted average trading price of Pioneer's shares.

"The acquisition of Pioneer is part of NovaGold's long-term strategy to consolidate and develop the Galore Creek district," said NovaGold CEO Rick Van Nieuwenhuyse.