Cape Lambert Resources has initiated the action in the High Court of Sierra Leone.
Dean is CEO and president of leading private global commodity trading company Gerald Group, with Gerald Metals, a wholly-owned trading company of Gerald Group, and was the previous owner of 75% of Timis Mining Corporation with the Timis Trust owning the remaining 25%.
The transfer of ownership from the Timis Trust to the Gerald Group was in breach of the terms agreed between Cape Lambert and Timis Mining Corporation.
As announced to the ASX on 22 October 2014, Cape Lambert Resources entered into a binding terms sheet with Timis Mining Corporation and Timis Mining to provide financing of US$20 million to assist Timis Mining with its acquisition of the Marampa iron ore mine in Sierra Leone from the administrator of London Mining PLC (agreement).
The agreement was divided into two parts, being: $8 million bridging loan; and $12 million for purchase of a royalty.
Pursuant to the royalty purchase, Cape Lambert Resources was to receive $2 per t of iron concentrate exported from the mine, payable on a quarterly basis on production of 24 Mt from the mine from the date of the first export shipment of iron ore from the mine.
Cape Lambert Resources had received $400 000 in royalties as part of the agreement and is owed approximately $2.5 million in relation to the March 2015 quarter when iron ore production from the mine ceased.
The plaintiff’s claim against the defendants jointly and severally is for:
“We have been patient in trying to settle this matter through consultation, however to recover the $8 million loan plus interest and the outstanding $2.5 million royalties this action appears to be the only avenue available to us,” comments Cape Lambert Resources executive chairman, Tony Sage.