How high do we think the share price will rally when the RIM wins the injunction matter on 16 October? It reached a 52wk high of 8.5c prior to this, given the additional compelling results we have recently received plus the strong possibility of gaining full control over assets I suspect fair value is now substantially higher than that. Perhaps over 10c by the end of the month assuming all goes well with the injunction matter? Not to mention the fact we are likely going to get additional drill results in the coming weeks. The market has irrationally sold this stock down due to fear of the unknown, failing to acknowledge the fact that it is highly likely that this was an absolute master stroke of a decision by management. If they are indeed correct in their assessment of the matter then they are absolute geniuses, and the rewards for shareholders will be substantial. The market has been irrational the past week, understandably as it came out of a long TH and there would have been nervous/impatient traders keen to get out, but I do sense we will see a return of rationality to the market as longer term investors begin to pile in, given the fact that the probabilities of the matter lean substantially towards this being very positive for RIM. Not to mention the fact that RIM is sitting on top of a potentially multi-billion dollar opportunity
Again, whilst there is some uncertainty of course, I believe this is minimal in comparison to the likelihood of a decision that is not only positive for RIM, but game changing, unlocking significant value for shareholders. The market will need to begin to price in the strong possibility of this being the case.1. Strong Contractual Grounds for Termination:
- Change of Ownership Clause: This is the crux of the case. Rimfire exercised its right to terminate the Earn-In Agreement with GPR due to a change in ownership within GPR. This is a clear contractual right that RIM had in the agreement, and courts generally uphold clear contractual terms. When a clause like this exists, and the event triggering it has undeniably occurred, the termination is legally sound. GPR, by contesting this, has no substantive grounds to challenge it, as RIM simply followed what the contract permitted.
2. RIM’s Legal Case is Robust:
Clear Evidence of Contractual Adherence: RIM has adhered to the terms of the agreement to the letter. The change of control at GPR triggered RIM's right to terminate, and RIM acted accordingly. GPR’s efforts to prevent this termination, despite their lack of grounds to do so, are essentially attempts to delay the inevitable. Courts respect the sanctity of contracts, and RIM has both the facts and the legal framework on its side.
GPR’s Lack of Legal Leverage: GPR has very little to stand on in terms of legal arguments. They are attempting to contest a termination based on a clause that clearly favors RIM. Given the evidence and the clear contractual stipulations, GPR is facing an uphill battle.
3. Balance of Convenience Favors RIM:
Impact of Halting Operations: An injunction is a temporary measure, but its effects can be significant. Courts assess the potential harm to each party when deciding whether to grant an injunction. In this case, halting RIM’s operations at this critical stage would be severely damaging to the company. RIM is in the midst of advancing its projects and halting these developments could disrupt their momentum, delay key milestones, and potentially harm investor confidence.
Limited Harm to GPR: On the flip side, GPR is not facing any immediate harm from operations continuing. If GPR were to win the case eventually (which is unlikely based on the facts), they could be compensated financially. Courts are generally hesitant to impose injunctions when monetary compensation is an adequate remedy. GPR’s argument for an injunction is weak because they will not suffer irreparable harm by allowing RIM to continue operating during the course of the legal proceedings.
4. Legal Precedents and Practicalities:
- Injunctions Are Not Easily Granted: Courts only grant injunctions when absolutely necessary, particularly when the potential harm to one party outweighs the harm to the other. Given that GPR can be compensated financially if they win the broader case, and RIM stands to suffer real and immediate harm if their operations are halted, it’s highly unlikely the court would grant GPR’s request. GPR’s case does not meet the threshold for an injunction, as it does not show that they would suffer irreparable harm.
RIM is in a commanding position going into the October 16 hearing. The contract is clear, RIM followed the legal provisions, and GPR’s claims are unlikely to succeed. Legally, RIM has the upper hand, and from a practical standpoint, halting operations would unfairly harm RIM while GPR faces no irreparable damage. The balance of convenience heavily favors RIM, and the legal principles behind the case point to a ruling in their favor. Therefore, GPR’s injunction request is not only weak but doomed to fail.
What is an Injunction? | JB Solicitors
