Karma Barndon Empire holds 60% of Penny's Find and acts as the...

• Karma Barndon

Empire holds 60% of Penny's Find and acts as the project's manager while unlisted Liongold-subsidiary Brimstone holds the remaining 40%.
The JV partners fell out over Brimstone's failure to pay a debt of $1.02 million, which was meant to fund underground development at Penny's Find.
Brimstone disputed Empire's claim and went to the Supreme Court for an injunction to stop Empire taking action under the mortgage and security documents it has over Brimstone's PFJV interest, which was dismissed by Registrar Simon Dixon on June 18.
Brimstone appealed the decision and headed to the Court of Appeal, where Justice Jennifer Smith upheld Dixon's decision and subsequently dismissed the appeal and awarded costs against Brimstone.
As part of its defence Brimstone claimed Empire failed to provide a proper account of all revenue receipts from the open cut mining; failed to provide a proper account of all expenses incurred in respect of the open cut mining; and, as manager, failed to distribute the cash proceeds of $1,174,583 that it was holding as revenue realised from the gold sale proceeds from the open cut mining.However Smith ruled that Brimstone had failed to establish a prima facie case for injunctive relief in respect of the standstill of the obligation to pay the balance of the agreed expenditure amount.
In her judgement she said Brimstone actually had a contractual right under the joint venture agreement to inspect all books and records maintained by Empire, it failed to do so.
Empire managing director David Sargeant said the latest court ruling reinforced the belief the court applications by Brimstone, which has related party interests seeking to remove the entire Empire board of directors, had been nothing short of deliberately obstructive.
Sargeant claimed Brimstone's actions were designed to delay its $1 million plus mine payment obligations and create smokescreens around the board.
He said the ruling drew 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 exercise its rights under the mortgage and security documents and appoint a receiver to Brimstone's interest in the PFJV to recover what it is owed from Brimstone.