Brimstone lights new fire in spat
THE Penny’s Find joint venture imbroglio has moved into Western Australia’s Supreme Court, with Empire Resources (60%) subject to an injunction application from ‘delinquent’ partner Brimstone Resources seeking to block any moves under the JV agreement to move on Brimstone’s 40% interest.
Brimstone, which is 100% owned by Singapore's LionGold Corporation, is claimed to owe Empire more than A$1 million, which Empire says was due for repayment by June 6.
It said Brimstone only paid up $80,000, leaving it apparently short $1.02 million.
In order to protect its claim over Penny's Find, yesterday Brimstone asked the court to grant an injunction to prevent its partner taking action under the mortgage and security documents it has over Brimstone's interest in the PFJV and any other properties.
Empire says its lawyers will stare down those acting for Brimstone and oppose the injunction application in a showdown likely to be held early next week.
The battle for Penny's Find, a small but profitable gold mine just 50km outside Kalgoorlie in WA, covers less than 9sq.km of dirt and is also behind a move backed by Brimstone at the corporate level.
Brimstone backed an "opportunistic" boardroom coup, according to Empire, with some 5% of disgruntled Empire shareholders seeking to replace Lee Christensen, David Sargeant and Adrian Jessup with Stephen Allen, Christopher Banasik and Brett Fraser.
Empire said two of the requisitioning shareholders, Williams and McDonald are directors of Brimstone and will not act in all shareholders' interests given the issue of unfunded contributions and interest relating to development costs is live.
Penny's Find has generated total sales of $9.3 million to date since mining started last year, with the fourth Penny's Find toll treatment campaign recovering 5520 ounces of gold.
Empire, which had around $800,000 in cash at the end of March, is also in dispute with Maximus Resources, owner of the Burbanks mill, over $830,000 that Empire claims it is owed for gold produced.
The PFJV has since switched to the Lakewood mill.
Empire is now looking at the feasibility of mining an underground resource of 248,000t grading 7.04gpt for 56,000oz at Penny's Find.
Empire shares last traded at 1.7c, valuing it at $8.2 million.
Anything to do with Lion Gold is a catastrophe . They have no legs to stand on .
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