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WPG wpg resources ltd

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Meledath

2,997 Posts.

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19/03/18

12:52

Post #: 31855444
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Originally posted by NZ Trader ↑

Pybar dispute
On 28 September 2017 WPG’s wholly owned subsidiary, Challenger Gold Operations Pty Ltd (CGO), received formal notices of dispute from Pybar under the surviving dispute resolution provisions of the Mining Contract with respect to $9.6 million (inc GST) of unpaid claims. These claims are fully disputed by CGO as they relate to work which was not performed in accordance with contract requirements and were are not in accordance with the mining contract or any agreed variations thereto. Further CGO has advised Pybar that these claims are also subject to a right of set-off, as set out in the Mining Contract, in an amount of $10.2 million (inc GST) as a result of losses caused by failure by Pybar to properly perform the Mining Services to an acceptable industry standard. The claims and counterclaims are now being litigated in the Supreme Court of South Australia.
The $9.6 million has been fully accrued by the Group with no receivable recognised at the date of these accounts.
The defence details

The defence, filed in the Supreme Court of South Australia, strongly refutes Pybar’s claims on several grounds including that:
- Pybar failed to properly perform its services with due care and skill and in accordance with the contract and good industry practice;
- Pybar failed to supply equipment and supplies of an acceptable standard, quality and specification;
- Pybar failed to provide adequate and properly qualified and trained labour;
- Pybar failed to progress services as contracted; and
- Pybar failed to apply a proper standard of skill necessary to competently perform services.
The defence sets out the arguments as to how Pybar’s various breaches of contract gave rise to Challenger suffering significant loss and damage in its operations for the consideration of the court.
Independently of its defence, Challenger has filed claims against Pybar exceeding $9 million (plus GST) for losses including in respect of costs overruns, damage to property, losses caused by improper mining practices, and for recovery of overcharges.
Challenger’s counterclaim against Pybar exceeds Pybar’s claim against Challenger of $8.7 million (plus GST).

Financial Position As at 31 December 2017 the Company had cash at bank of $23.3 million following the drawdown of the $20 million Byrnecut facility.

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WPG Price at posting: 2.9¢ Sentiment: Buy Disclosure: Held
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