Marindi takes a stand

PERTH (miningweekly.com) – ASX-listed junior Marindi Metals has drawn battle lines, issuing ultimatums to Kidman Resources and Rox Resources.

Marindi on Monday told shareholders that it had launched proceedings in the Supreme Court of Western Australia after fellow-listed Kidman Resources denied a binding agreement under which Kidman would supposedly sell lithium rights to Marindi.

Marindi earlier in the day released a statement stating that the two companies had reached a heads of agreement in April this year, over email. The alleged agreement would see Marindi acquire the lithium rights to the Mt Holland project, in the Forrestannia lithium belt, subject to Kidman retaining a 2% net smelter return on all pegmatite minerals and rights to all other minerals within the relevant tenements.

In exchange, Marindi would pay Kidman A$100 000 in cash and issue A$175 000 worth of shares.

However, Kidman denied that any binding agreement had been reached in relation to the lithium rites, and said that it was considering its legal options.

In retaliation, Marindi launched legal proceedings in the Supreme Court, seeking declaratory relief that a binding agreement existed between the two companies.

Meanwhile, Marindi has also lashed out at fellow-listed Rox Resources, calling upon the company to complete the sale of its joint venture interest in the Reward zinc project, in the Northern Territory.

Rox Resources in August accepted Marindi’s A$21-million offer for its 49% share in the Reward project, subject to joint venture (JV) partner Teck Resources not exercising its option over the project. Teck can earn a 70% interest in the Reward project by spending A$15-million by 2018.

At the time that Rox and Marindi struck the deal, Teck expressed its concern over the agreement and its implications for the JV agreement, reserving its pre-emptive rights.

The Canadian miner in October exercised its rights to match Marindi’s offer, offering Rox a cash consideration of A$8-million, shares worth A$3.6-million, or alternatively A$2.6-million in cash, a three-year promissory note with a face value of A$5.25-million, and a deferred payment of A$3.75-million, payable upon the completion of a bankable feasibility study or the expiry of six years, whichever came first.

Marindi on Monday said that it did not accept that Teck exercised its pre-emptive rights in the manner and time frame required by its JV agreement with Rox.

The company said that in the absence of receiving confirmation from Rox that it will move to complete the sale, Marindi has reserved its rights to start legal proceedings seeking specific performance of the acquisition.

Rox on Monday went into a trading halt.