WA’s Supreme Court backs Empire to recover $1 million owed
The Supreme Court of Western Australia has backed WA gold producer, Empire Resources Ltd (ASX:ERL), in its bid to recover $1 million owed to it by its JV partner in the Penny's Find Joint Venture.
ERL holds a 60% interest in and acts as Manager for the Penny's Find Joint Venture that owns and operates the Penny's Find gold mine, located 50km northeast of Kalgoorlie in Western Australia. The remaining 40% mine interest is held by private company Brimstone Resources Ltd.
ERL today announced that it will exercise its rights under the mortgage and security documents held by it, and other means available to it, to recover the approximately A$1 million owed to it by Brimstone. This follows Brimstone failing to make the repayment to ERL that was due on or before June 6.
On June 7 ERL reported that Brimstone had sought an injunction from the Supreme Court of Western Australia to prevent ERL taking action under the mortgage and security documents it holds over Brimstone's interest in the Penny’s Find JV and other property. This followed Brimstone's failure to pay more than $1 million owing to ERL for the open-pit mining outcomes.
Brimstone’s application for this injunction was dismissed by a judge of the Supreme Court of WA on 18 June. This decision was subsequently appealed by Brimstone to the Court of Appeal. This new appeal matter was heard before the Court of Appeal yesterday, where it was dismissed and costs were also awarded against Brimstone.
ERL Managing Director, Mr David Sargeant, welcomed the court findings, “The latest court ruling reinforces the belief of the Empire Board that the court applications by Brimstone, which has related party interests currently seeking to remove the entire Empire Board of Directors – have been nothing short of deliberately obstructive.
“On all observations, Brimstone’s actions were designed to both delay its $1 million plus mine payment obligations and, create smokescreens around the incumbent Board.
“Thankfully, the WA Supreme Court has ruled on the true balance of the issues at hand and found in favour of Empire. It is a ruling which has to now draw into question the relevancy and alleged purpose of the dissident Brimstone-related shareholders in pushing for a shareholders’ vote late next month, seeking a spill of the entire Empire Board.”
Empire will now exercise its rights under the mortgage and security documents to appoint a receiver to Brimstone's interest in the PFJV and other means available to it to recover approximately $1 million from Brimstone.
Overall this is an early stage play and as such any investment decision should be made with caution and professional financial advice should be sought.
Penny’s Find has recently completed its initial open-pit gold mining operation and awaits a final investment decision around whether the mine will make the transition to an underground gold mining operation.
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