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Pathfinder Resources (ASX:PF1) - Managing Director, Shannon Green
Managing Director, Shannon Green
Source: The Market Herald
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  • Bauxite explorer Lindian Resources (LIN) has lost a battle in the Malawi High Court over a disputed agreement for the Kangankunde rare earth project
  • Under the terms of its 2018 agreement with Rift Valley Resources (RVR), Lindian would receive a 75 per cent share of the project upon stage two conditions being met by both parties
  • Lindian had to seek and injunction when RVR sought to unilaterally cancel the agreement
  • Hearings have continued through 2019, with Lindian at all times believing it had a strong case
  • Despite this, the court did not rule in favour of Lindian — and the company now has six weeks to lodge an appeal
  • Lindian Resources has fallen 7.7 per cent today, with shares trading at 1.2 cents each as at 1:05 pm AEST

Bauxite explorer Lindian Resources (LIN) has lost a battle in the Malawi High Court over a disputed option agreement for the Kangankunde rare earth project.

The 75 per cent buy-in option agreement between Lindian and licence holder Rift Valley Resources (RVR) dates back to September 2018, and the troubles started shortly thereafter.

The dispute

Under the terms of the agreement, Lindian would receive a 75 per cent share of the project upon stage two conditions being met by both parties.

The Malawi government had issued a new exploration licence to RVR and its head, Michael Saner. With the issue of a consent order, all matters were considered settled among the parties.

However, it took less than two months for things to go south.

In late November 2018, Mr Saner and RVR wrote to Lindian unilaterally cancelling the agreement, citing changed circumstances in Malawi which rendered the contract unenforceable.

They instead offered an entirely new deal under which Lindian would buy a 100 per cent stake in Kangankunde for US$70 million, plus a five per cent royalty paid to RVR shareholders.

It was at this point Lindian sought an injunction from the Malawi High Court.

The decision

Hearings have continued through 2019, with Lindian at all times believing it had a strong case.

The court had been in deliberations since early November, and finally handed down its findings.

Despite this, it did not rule in favour of Lindian.

The company now has six weeks in which to lodge an appeal against the judgement.

Lindian maintains it “has a strong legal position and will pursue all legal avenues available to it.”

Lindian Resources has fallen 7.7 per cent today, with shares trading at 1.2 cents each as at 1:05 pm AEST.

LIN by the numbers
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