Reported by Staff

DENVER - A spokesperson for the San Luis Valley Ecosystem Council says that a Toronto-based energy company will consider selling its mineral rights in the Baca National Wildlife Refuge where it wanted to drill natural gas.

Christine Canaly says Lexam Explorations Inc. (TSXV:LEX) has agreed to sell its mineral rights to the  area in the San Luis Valley, about 200 miles southwest of Denver, provided a $9.7 million deal can be reached by May 17.

The Ecosystem Council and Citizens for San Luis Valley  -Water Protection Coalition sued the U.S. Fish and Wildlife Service for approving drilling on the wildlife refuge adjacent to the Great Sand Dunes National Park. Lexam intervened on the government’s behalf.

The agreement would settle the lawsuit, and, according to Canaly, the environmental groups will now attempt to raise private funding to buy the mineral rights.

Lexam Vice President Stefan Spears confirmed Wednesday that an interim agreement was reached, but said the federal judge overseeing the case asked parties not to discuss it.

Settlement talks have been ongoing since a federal judge granted the conservation groups a preliminary injunction in 2009, blocking the drilling while the lawsuit continued.

The lawsuit claims that drilling for natural gas would irreparably harm the refuge, home to several colonies of Gunnison’s prairie dogs, a candidate species for the endangered list.