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Rimfire–Golden Plains Legal Situation Summary

I. Overview of the Legal Situation

• Dispute: Rimfire Pacific Mining Limited (ASX:RIM) and Golden Plains Resources Pty Ltd (GPR) are in formal dispute after Rimfire terminated two earn-in agreements (Fifield and Avondale projects) in late 2024.

• Trigger for Termination: Rimfire cited a change of control at GPR following the Supreme Court of Victoria’s ruling in Resource Capital Ltd v Giovinazzo [2024] VSC 548, which reversed certain share issuances and board appointments at GPR on grounds of oppressive conduct.

• Current Status: GPR has disputed the validity of the terminations and has issued a dispute notice. Arbitration proceedings are pending.

II. Key Legal Issues

1. Validity of Termination Based on Change of Control Clause

• Whether the Supreme Court’s ruling constitutes a “change of control” as defined in the earn-in agreements.

• Whether Rimfire correctly exercised its termination rights under the agreements, including:

  • Proper notice procedures,

  • Good faith in invoking the clause,

  • Compliance with any conditions precedent.

2. Interpretation of “Change of Control”

• How “control” is defined in the agreements (e.g., shareholding percentage, board composition, voting power).

• Whether the court’s annulment of share issuances and board positions materially altered control as intended under the contract.

3. Sunk Costs and Reimbursement

• Whether GPR is entitled to any compensation for expenditures made under the earn-in prior to termination.

• Contract language appears to exclude refunds, but GPR may argue unjust enrichment or equitable considerations.

4. Procedural and Good Faith Considerations

• Whether Rimfire’s conduct in the lead-up to and following the termination meets standards of good faith.

• Whether Rimfire delayed, misrepresented, or otherwise acted opportunistically.

5. Potential for Court Oversight or Injunctions

• GPR has already sought injunctive relief regarding the Fifield termination.

• The arbitration may determine if court intervention is warranted to preserve rights pending resolution.

III. Relevant Legal Precedents & Practice

1. Australian Contract and Corporate Law Precedents

• Change of Control Clauses
  Australian courts generally uphold contractual change of control clauses, provided they are clear and unambiguous (e.g., Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] WASCA 31).

  • A court or tribunal will assess the substance of the change, not just the formalities.

  • Control can mean de facto control, not just shareholding percentages.

• Oppressive Conduct and Corporate Remedies
  The Supreme Court’s ruling applies established principles under s232 of the Corporations Act 2001 (Cth) regarding oppressive conduct, including invalidating share issues and board appointments made for improper purposes (Re Spargos Mining NL (1990) 3 ACSR 1).

• Good Faith in Contractual Termination
  Australian law imposes a duty of good faith on parties exercising contractual rights (Burger King Corporation v Hungry Jack’s Pty Ltd [2001] NSWCA 187), requiring:

  • Fair dealing,

  • Not acting capriciously or for an ulterior motive,

  • Exercising rights honestly and reasonably.

2. Resource Sector Precedents

• ExxonMobil v Chevron (2024)
  Ongoing arbitration over whether Chevron’s takeover of Hess triggered a change-of-control clause in Guyana oil assets JV. This highlights the global significance and complexity of such clauses in resource partnerships.

• Iluka v Cameco (2017)
  Earn-in dispute where the earn-in party’s failure to meet milestones led to termination, later upheld after arbitration. Reinforces that commercial risk lies with the earn-in partner until milestones are met.

IV. Strategic Observations

1. Rimfire’s Position Strengths

   • Clear contractual rights (if the clause is well-drafted).

   • Independent court judgment as evidence of control change.

   • No earned equity yet by GPR (less risk of clawback).

2. GPR’s Possible Leverage

   • Claims of bad faith or technical breaches in termination procedure.

   • Equitable arguments over sunk costs.

   • Public and shareholder pressure through media or forums.

3. Procedural Complexity

   • Arbitration may take months to over a year, depending on the tribunal's management.

   • Potential for parallel court actions if injunctions or appeals are pursued.

4. Reputation and Commercial Fallout

   • Both parties risk investor and market confidence erosion.

   • Protracted disputes can deter partners and investors.

V. Conclusion

While Rimfire appears to have strong legal footing based on the change-of-control clause and the court’s findings, arbitration outcomes are never guaranteed. Much will depend on:

• The precise drafting of the agreements,

• Rimfire’s procedural compliance,

• The tribunal’s view of good faith,

• How much weight is given to commercial fairness versus strict legal rights.