Right Of First Refusal Partnership Agreement

In some settings, ROFR mainly benefits older producers, whose main objective is to allow a senior to consolidate 100% of the ownership of an asset, often after the start of production, when his junior partner tries to monetize his position to finance new exploration activities. Alternatively (or in addition), ROFR can be used to protect the non-outgoing party from any burden from an undesirable partner, provided that it is financially able to do so. In both cases, there is a perception that junior partners often do not have the financial capacity to acquire the shares of their majority partner, let alone to assume the full capital and operating expenses associated with a production mine, and, therefore, some might believe that an ROFR is of limited value to a junior partner. However, like the recent Ontario Superior Court of Justice (OSCJ) case of Barrick Gold Corporation v. Goldcorp Inc., 2011 ONSC 3725 (Barrick), a ROFR can be incredibly valuable in the hands of a junior partner. . . .