TORONTO (miningweekly.com) – Canadian explorer and project developer Sanatana Resources has received $403 189.86 from international gold producer Iamgold, who paid on behalf of subsidiary Trelawney Mining and Exploration, for the full costs awarded by the Ontario Mining and Lands Commissioner (MLC) regarding Trelawney's failed easement application.

In April 2013, Trelawney, which was acquired by Iamgold in the previous year, filed an application with the Ontario MLC regarding proposed easement rights on the Watershed exploration property, in Ontario.

The discovery of the Côté gold deposit on the adjacent property held by Trelawney had highlighted the potential for low-grade disseminated gold mineralisation within brecciated zones of the Chester granodiorite, of which the Watershed property formed part.

Sanatana had in 2011 entered into an option and joint venture agreement with Trelawney Augen Acquisition Corp (TAAC), which granted Sanatana an option to acquire up to 51% of the Watershed property, consisting of 46 mining claims of about 7.7 ha within the townships of Yeo, Chester, Neveille and Benneweis, Ontario.

In 2013, Sanatana expanded the Watershed property by acquiring a 20% interest in three more mining claims located in these townships.

As at November 28, 2012, Sanatana had exercised its first option and had become the legal and beneficial owner of 50% of the Watershed property. Sanatana had until March 23, 2016, to decide whether to exercise its right to acquire a further 1% in the Watershed property.

After discontinuing its application for easements over the Watershed property on November 10 last year, Sanatana’s TSX-V-listed stock jumped 43% to C$0.05 apiece late last month, when the MLC ordered Trelawney to pay more than $400 000 for its costs of defending its claims.

"We are pleased to receive payment from Iamgold and, with this significant legal victory now in hand, Sanatana looks forward to refocusing its efforts on further exploration of its portfolio of properties,” Sanatana CEO Peter Miles stated on Monday.

Sanatana had previously explained that it was of the view that Trelawney was trying to carve back rights that TAAC had granted to Sanatana. “The proposed carve back of rights, among other things, was not acceptable to us and frankly we do not believe that Trelawney was acting reasonably in seeking the easements,” Sanatana said in January.