Deal Litigation in Mining M&A: Predictable risks — and practical ways to protect value

Explore other chapters in the Mining Disputes Insights Series 2026.

Key takeaways

• Deal litigation is a foreseeable transaction risk in Canadian mining M&A.

• Governance, timing, and drafting missteps are sources of disputes.

• Precision in process and documentation materially reduces execution and litigation risk.

Why this matters

As scrutiny of Canadian mining M&A transactions increases, deal disputes are no longer exceptional events — they are risks that should be anticipated and managed from the outset.

Overview

Deal litigation is increasingly a foreseeable transaction risk. For mining boards, executive teams, and financiers, the question is no longer whether a deal could be challenged, but whether deal risk has been adequately managed from the start.

Over the past five years, Canadian M&A transactions have been challenged with increased frequency before courts and securities regulators. Recent disputes span a range of topics, including busted deals, defensive tactics, governance and process flaws, disclosure issues, fairness of consideration, and post-closing fights over dissent rights, indemnities, earn-outs, and access to privilege.

The cases discussed below illustrate how litigation risk can often be traced back to choices made during deal structuring, negotiation, and execution — and how those risks can be better anticipated, priced, and mitigated.

Process challenges remain a live risk

Take-private transactions remain vulnerable to process attacks

Boards should assume that their governance process could be scrutinized. While courts and regulators continue to focus on substance over form, process discipline remains the best defence.

In Altius Renewable Royalties Corp (Re), 2024 ABKB 749, a take-private transaction was challenged for alleged governance flaws. Although the challenge was unsuccessful, the decision provides practical guidance on common process issues, including:

• Retainer of legal counsel: Separate special committee counsel is not mandatory where independent directors overlap and no conflicts exist.
• Wall-crossing: Care should be taken when wall-crossing a majority shareholder as it could weaken the company’s negotiating leverage. Risks can be mitigated through delayed outreach, shareholder canvassing, reliance on independent financial advice, and efforts to create competitive tension.
• Financial advisors: A special committee can negotiate price and key terms without financial advisors, provided independent advice is obtained before final pricing and recommendations are made.
• Auction / go-shop: While sometimes useful, auctions and go-shops are not required. Committees can rely on informed views of market conditions shaped by recent strategic processes.
• Voting support agreements (VSAs): VSAs with a sizeable group of shareholders are not inherently unfair, but must serve a legitimate business purpose and cannot provide collateral benefits.

Practical insight: Process discipline — not perfection — is the most effective safeguard against governance-based challenges.   

Timing and its consequences must be expressly defined

“Time is of the essence” clauses do not cure unclear timelines 

If timing matters, agreements must say so explicitly. Courts will not backfill deadlines for covenants based on efforts language such as “commercially reasonable efforts” and “as promptly as practicable.” These risks are magnified in mining deals, where regulatory approvals, permitting milestones, financing windows, and commodity cycles can materially affect deal value.

In Nova Fish Inc v. Cold Ocean Salmon Inc, 2025 NLCA 28, the buyer breached its efforts covenants, but the seller was still unable to rely on a “time is of the essence” clause because the agreement contained no fixed deadlines for the breached covenants. The Court confirmed that such clauses apply only where a specific time obligation exists.

Practical insight: If failure to achieve regulatory or other milestones is expected to trigger a termination right, the agreement must clearly define when those milestones are due.

Precision beats subjective intentions

Courts enforce the deal that was signed — not the deal that was discussed

In Chemtrade Electrochem Inc v. Superior Plus Corp., 2025 ABCA 31, a reverse termination fee was not payable, even though the business principals discussed such a payment if regulatory approvals were not obtained. The signed agreement tied the fee to a failure to obtain “HSR Approval” (a defined term), not to the broader regulatory condition precedent to closing. On the facts, HSR Approval required only that the parties wait out the statutory waiting periods in the U.S. process (and any extension). When the agreement terminated, that defined term was met — so the fee was not triggered.

Courts have significant discretion to weigh the surrounding circumstances when interpreting an agreement, including pre-existing knowledge and negotiations. In Chemtrade, there was ample evidence that the parties’ principals discussed the buyer paying a reverse termination fee if the necessary regulatory approvals were not obtained. Nevertheless, this evidence was discarded because the final agreement was not ambiguous. In other cases (Project Freeway, Simpson Oil), courts have used letters of intent as an interpretive aid where there is ambiguity in the final agreement.

Practical insight: Robust “entire agreement” clauses and careful use of defined terms materially reduce litigation risk from prior negotiations.

Earn-out disputes are rising

Earn‑outs are common in mining transactions involving development assets, technical uncertainty, or commodity price exposure. However, they often defer rather than eliminate valuation risk.

In Project Freeway v. ABC Technologies Inc., 2025 ONSC 1048, the Ontario court held that certain post-closing transactions did not trigger earn-out acceleration because they did not materially impair the earn-out metrics. The decision reinforces that courts will generally focus on economic impact rather than formalistic interpretations of triggers unless the agreement clearly dictates otherwise.

Practical insight: If post‑closing conduct is meant to constrain operational flexibility or trigger payments, the agreement must say so explicitly.

Address privilege before closing

Parties should clearly allocate control over the target’s privilege. Failure to do so can become outcome‑determinative in post‑closing disputes, particularly in mining deals with long operating histories or legacy issues.

In Dente v. Delta Plus Group, 2023 ONSC 3376, the court concluded that privilege had not transferred because sellers’ counsel did not represent the target and reasonable efforts were made to remove privileged materials. The outcome turned on facts that could have been avoided through express terms concerning privilege.

Practical insight: Privilege should be addressed directly in transaction documents — not left to the uncertainty of live litigation.

Conclusion

The early involvement of M&A litigation specialists can inform risk management by the deal team and align commercial objectives with execution certainty. In today’s Canadian M&A environment, transaction disputes are no longer exceptional events; they are a foreseeable risk to deal execution and post-closing economics.

The cases discussed above illustrate that many of the issues driving litigation — ranging from governance challenges and timing misalignment to drafting imprecision and post‑closing friction — arise from decisions made well before any dispute crystallized.

For mining company leadership and financiers, two practical themes emerge:

• Execution risk increases from governance flaws. Early process choices — who does what, when key decisions are made, and how the record is built — may later be tested under pressure.
• Precision avoids uncertainty. Where regulatory clearance, financing, or market exposure affects deal value, precision is important for timelines, exit mechanics, and any termination fees, to avoid a search for intent in the parties’ negotiating history.

If you would like to discuss how recent litigation trends may affect a current or proposed mining transaction — or how deal risk can be better managed at the structuring stage — our Global Metals & Mining team would be pleased to continue the conversation.

Our Mining Disputes Insights Series highlights recent court decisions, legal developments and policy shifts that are influencing how capital is deployed, how transactions are structured, and how projects are advanced and defended when challenged. Each article offers focused insight on a specific pressure point or recent development, with an emphasis on practical consequences for mining companies, investors, and other market participants. Across the series, we explore questions that matter to both operational and deal teams.

For a closer look at developments affecting the mining sector and guidance on addressing challenges and opportunities, check out our Mining Prospects blog.