PERTH (miningweekly.com) – Gold miner Eastern Goldfields on Wednesday said that it would vigorously defend legal proceedings launched in the Western Australian Supreme Court by project house GR Engineering Services.
GR Engineering this week announced that it had started legal proceedings against Eastern Goldfields, claiming A$9.9-million plus interest and costs after commercial discussions between the two parties broke down regarding a contract for the refurbishment of the 1.2-million-tonne-a-year Davyhurst gold processing plant, in Western Australia.
GR Engineering was claiming that the final contract price was A$18.5-million, while Eastern Goldfields maintained the contract price was around A$12.5-million, of which A$10.4-million has already been paid.
GR Engineering suspended work at the Davyhurst plant in May this year.
Eastern Goldfields said that despite the project house saying in June that it would immediately and unconditionally restart work to commission the Davyhurst mill, the company failed to do so, prompting Eastern Goldfields to complete the refurbishment itself, at which time the company discovered ‘numerous defects and omissions’ by GR Engineering.
The project house has said that the alleged defects were ‘immaterial’.
Eastern Goldfields on Wednesday warned shareholders that rectifying the defects, as well as GR Engineering’s wrongful suspension and the project house's failure to assist in completing the refurbishment, has delayed the restart of production at Davyhurst.
The gold miner said that it was now working through the commissioning process, and will provide shareholders with an update on the completion of commissioning and production in due course.