From my impression, what we may have here is a classic "Catch-22" situation.
It's not about how much FFX shareholders and the company have done in the past, it's about what the Malian government are demanding FFX do in the future, and if those demands are not met, then they are likely threatening to close down Leo, because they see Leo and FFX essentially as the same company, partially due to them both having the same in-country manager, which in hindsight was a corporate strategic mistake.
So what does FFX do, walk away from Morila S.A. and then have the government sanction Leo, or does FFX (and Leo) try and reason with the government?
If FFX walks away, Mali may close Leo (no matter how many times Leo makes representations and tries to distance themselves from FFX).
It's all about the Mali governments perception of the relationship between the 2 companies.
If you want Leo, then FFX has to pay something, on demand.
If FFX walks away from Mali, then you will likely lose everything, including Leo.
Either way, FFX loses (hence the Catch-22), because FFX (and potentially Leo) pays.
If it wants Leo to exist in Mali, FFX may have to do some form of negotiation and payment.
FFX cannot win in this situation.
All the power over both FFX and Leo rests with the government of Mali, this is a critical point.
Put bluntly, if you attempt to play hard ball with the government of Mali, then they can metaphorically shoot you, and all your company siblings.
And going crying to the international courts for justice will serve you nothing, except cost you a fortune and put you in a 5 year holding pattern. The junta treat international courts with disdain and don't recognize their validity, especially European ones.
FFX may have to choose the lesser of two poisons, and I'd suggest, the one that costs the least, hence the reason why international lawyers are drawn into complex negotiations with a special tribunal on the issue created by the Malian government.
You cannot bulldozer your way through this type of issue or situation, it's going to require intelligence, subtlety, flexibility, astuteness and adroitness, and even then, at the end of the day, you may have to lick your wounds in order to progress.
It's actually a quite fascinating study.
Gw
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