Shares of Clifton Star Resources (CVE:CFO) tanked more than 20 percent after the company said the Quebec Superior Court has rejected its request for a safeguard motion regarding its rights in the Duparquet project option agreements.
The request by Clifton was made to suspend its obligations under its option agreements following litigation instituted between some of the option owners, which it said hindered efforts to finance its next payment of $10 million.
This option payment is due December 1, according to Clifton's statement, and is part of a total of $52.2 million in option payments due from Clifton by 2017. In exchange, the company would acquire the 90 percent interest in the Duparquet project it does not already own.
The company has tried for the last year to renegotiate terms of the option arrangements in light of the weak gold price and the challenging financial market for miners. It said it will deploy its best efforts to maintain its option to acquire the remaining 90 percent stake of the project, and will reevaluate its investment in early December.
The Duparquet project covers 7.7 kilometres of strike length along the prolific gold bearing Porcupine-Destor Fault.
Shares were last down over 22 percent at 7 Canadian cents as of 12:44pm ET.