PERTH (miningweekly.com) – TSX-V-listed Superior Gold has launched legal proceedings against ASX-listed Vango Mining and its subsidiary Dampier Plutonic (DPPL) over tenements northeast of the Plutonic gold mine, in Western Australia.
Superior Gold, through its own subsidiary Billabong Gold, is claiming that it holds rights of first refusal under a 2014 ore treatment agreement over tenements within Vango’s Plutonic Dome project, and that these rights were breached during Vango and DPPL transactions in 2016 and 2017.
The 2014 ore treatment agreement was entered into between ASX-listed Northern Star Resources, Vango and DPPL, with Northern Star assigning these rights to Billabong in October 2016.
Billabong is now seeking remedies from the Supreme Court of Western Australia.
Vango told shareholders that Billabong’s claims were speculative and without merit, noting that the ore treatment agreement had been terminated more than 12 months ago.
Vango also questioned the timing of the legal action, noting that Billabong had known about the transactions for a number of months, and that the complaints raised were similar to a previous dispute notice in July 2017, which had not proceeded.
Takeover target Dampier Gold on Friday expressed concern that Vango could have breached a warranty and condition of the binding term sheet with Vango in relation to the K2 joint venture (JV), with the company now demanding a full written explanation.
Vango and Dampier in 2017 signed a farm-in agreement over the K2 mine development, which forms part of the larger Plutonic Dome project, under which Dampier would contribute the lesser of 50% of the capital expenditure or A$3-million to the development, exploration and gold mining at the K2 deposit.
Vango in September this year launched an all-scrip offmarket takeover offer for Dampier Gold, which valued the explorer and developer at 5.6c a share. Vango was offering two of its own shares for every seven Dampier shares held.
Dampier has urged its shareholders to reject the takeover offer, citing an independent director’s report that valued Dampier shares at between 4.02c a share and 7.99c a share, with a preferred value of 6.01c a share.
Vango said that the target report from Dampier containing the independent report was misleading to the company’s shareholders, saying it disregarded the value of Vango shares in favour of a technical valuation of the company’s assets.
Vango noted that the report also found that dilutive share issues would be required to fund Dampier’s expenditure contributions to secure a JV interest in the K2 mine, but did not adequately deal with the issue in determining the value of Dampier Gold shares.
The Vango offer is expected to close on November 16.