PERTH (miningweekly.com) – ASX-listed Rafaella Resources has moved to alleviate shareholder concerns around an unsolicited letter sent by two members of the Spanish Congress.
The letter related to the San Finx tin and tungsten mine, which Rafaella Resources earlier this year reached an agreement with owner Spain’s Aloriza Minería to acquire.
Under the terms of the agreement, Rafaella will acquire the project through its subsidiary Biscay Minerals for €5-million, which will be payable out of production royalties only after 1 000 t of metal has been produced and sold.
The letter suggested that criminal proceedings have been brought against various "civil servants and public authorities… regarding illegal permitting and associated alleged crimes at the San Finx mine”. The letter also notes that these proceedings were presented to Court in December and January.
Rafaella told shareholders that it was not aware of any proceedings, but noted that the Court had dismissed and shelved previous cases submitted by the relevant parties.
The letter also raises the issue of fines amounting to over €30-million relating to previous "unpaid mandatory discharge control tax payments", but Rafaella said that there was no notification of any such payment due by the acquisition, or thereafter.
Furthermore, the letter also claims that the company would be required to construct “an active acid mine drainage treatment facility to operate in perpetuity” which will “require significant investments”, and then suggests that “it does not seem Rafaella Resources or its subsidiaries can meet such obligations in the short-term as expected”.
Rafaella told shareholders that as part of the due diligence conducted by the company during the acquisition of Tungsten San Finx SL, Rafaella reviewed the budget for the construction of the water treatment plant as prepared by leading Spanish experts in the field of water treatment, and full provision had been made for this in the project economics.
“The letter sent directly to shareholders, was unsolicited and not authorised by Rafaella. The board considers that issues or concerns should be addressed through direct discussion and consultation with the company so that all shareholders can have the benefit of the Company's response,” said MD Steven Turner.
“Rafaella is also aware of similar misleading information to that contained in the letter being published elsewhere. I urge shareholders to contact the company directly if they have any further questions regarding the letter or any future unsolicited and unauthorised communications regarding the matters [that are] the subject of the letter.
“Rafaella is committed to a transparent environmental, social and governance reporting framework and is in the process of completing the first internal review of this framework that reports against the World Economic Forum guidelines. In the meantime, the company continues to advance the San Finx and Santa Comba projects in compliance with its legal and environmental obligations and develop strategically important domestic supplies of critical metals in Europe, where the source of these metals can be traced to conflict-free and responsibly managed operations.”