Director, Mr Philip Christie has provided consultancy services to Oropa through his company Yellowmoon Gold Mines Pty Ltd (Yellowmoon) over many years. In early 2008 Yellowmoon entered into a further written Consultancy Agreement purportedly coming in effect on 8 February 2008 and running for a period of 3 years (the Consultancy Agreement). Pursuant to the terms of that Consultancy Agreement, consultancy fees of $17,500 were payable per month.
There is currently a dispute between the Company and Yellowmoon as to whether, having regard to the circumstances in which the Consultancy Agreement was entered into, the Consultancy Agreement is enforceable by Yellowmoon. As at the date of this report, the parties are in negotiations to try and resolve the dispute.
In the unlikely event that those negotiations are unsuccessful, it is anticipated that the Company would seek rescission of the Consultancy Agreement.
It is also anticipated that Yellowmoon would contend that the Consultancy Agreement was terminated prior to the expiry date and that a termination fee would be payable.
The maximum liability of the Company for such termination fee as at balance date if Yellowmoon’s argument was successful would be $337,750 (excluding GST)."
The month or so should be interesting indeed. :-)
ORP Price at posting:
6.9¢ Sentiment: None Disclosure: Held
