Endeavour Mining has been accused by Lilium Mining of misrepresentation over the sale of two African gold mines, as the fallout from the tenure of ousted CEO Sebastien de Montessus continues.
Lilium made the allegations after purchasing the Wahgnion and Boungou projects in Burkina Faso last June. It’s part of a counterclaim that alleges “misrepresentation and concealment of information relevant to the financial position and operating capabilities” of those mines, according to a statement from Lilium on Monday.
That follows a case filed in March by Endeavour before the London Court of International Arbitration. The London-listed mining company has said Lilium has so far missed payments totaling $107-million in relation to a deal that it expected to eventually exceed $300-million.
The dispute comes after Endeavour fired CEO De Montessus earlier this year, citing “serious misconduct” and irregularities tied to the sale of another mine in Ivory Coast. “Lilium’s suspicions that it had been misled in relation to the transaction appeared to be confirmed” by the CEO’s removal, the company said.
“Discrepancies between the represented and actual financial and operative states of the mines became apparent in the aftermath of the acquisition,” Lilium said in the statement.
Endeavour didn’t reply to a request for comment, while a spokesperson for de Montessus declined to comment.
Endeavour, which operates gold mines in West Africa with assets across Senegal, Ivory Coast and Burkina Faso, said last month it initiated the arbitration case after Lilium failed to “fulfill certain payment obligations.”
Lilium — a subsidiary of Lilium Capital, an investment firm founded by US-Burkinabe businessperson Simon Tiemtore — said it issued a counterclaim against Endeavour on April 2 for “misrepresentation and breach of warranty.”
Following an internal investigation, Endeavour said last month that it still doesn’t know who the ultimate beneficiaries were of payments of more than $20 million made at the instruction of its former CEO to an entity in the United Arab Emirates. The mining company said it found no evidence of bribery or payments to sanctioned persons or terrorist groups.
De Montessus has said he didn’t benefit personally from the payments. The ex-CEO said they were made to an established contractor of Endeavour, and that he was denied the opportunity to respond to specific allegations before they were published.