An uncommon sight for mining companies, Western Australia-based gold mining company Viking Mines (ASX: VKA) has won the judge’s favour and over $4 million from its lawsuit against the buyers of its gold mining project in Ghana, Akaose Project. The buyers of the $14 million project include Akoase Resources Limited, BXC Company Ghana Limited and Cheng Yi.
It will receive $2.8 million in royalties from the defendants. Plus, it will get a $60.5k interest on the royalties, $136.5k costs awarded and a $1.02 million outstanding balance.
Commenting on the win, Viking Mines Managing Director & CEO, Julian Woodcock, said, “I am extremely happy to have received this judgement from the Court and recognise that the legal system in Ghana has rightfully awarded our subsidiary company RAL the monies which are contractually owed. It has been a long process to get to this point, but the Company has been committed all along and has remained steadfast in the knowledge that the Defendants were mining at the Akoase Project and royalties were due.”
The Company was to receive $11.2 million in cash in 2017 when the sales deed was signed, but it only received $7.04 million in sales proceeds. Years passed, but it didn’t receive the remaining $4.2 million and an additional $2.8 million in royalties to be paid over the years. In 2018, Viking Mines filed the lawsuit following multiple missed payments. In July 2021, when the court deferred its decision, the defendants tried to make the case go away by paying $4.2 million towards outstanding claims. That didn’t stop Viking from pursuing it, and like a true Viking, it emerged victorious.
The court hearing was held on January 24, 2023. The judgement determined that the defendants would have to pay the full royalty on 50,000 ounces of gold produced at a rate of $56.2/oz, totalling $2.8 million. In addition, Viking subsidiary and seller Resolute Amansie Ltd (RAL) will get costs of Ghana Cedis (GHS) 1.2 million, amounting to $136.5k.
That’s not all. The defendants will also need to pay a 5% annual percentage rate (APR) interest on the royalty on the dates on which the royalties were due. These dates, as noted by the court, are June 1, 2022, for 33,000 oz of gold produced and January 24, 2023, for 17,000 oz of gold produced.
Woodcock added, “We will soon submit our calculations to the Court and expect to promptly receive the execution of Judgement which will allow us to proceed to [use] all avenues as afforded by the law to recover what has now been established by the Court to be legally owed. The amount owed exceeds A$4M at the current USD exchange rate and, when received, will further bolster our strong cash position of A$3.83M at the end of the December quarter.”
As per Viking’s calculations, the three companies owe over $4 million, with an interest of $530.4 accruing every day. The Company will use this money to advance its Canegrass Battery Minerals Project, targeting vanadium pentoxide.
Let it be known that crime doesn’t pay…not the criminal, at least.
Alinda is a Business Reporter for The Sentiment
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