big changes at liongold, page-3

Here's the announcement from Bass Metals (ASX: BSM)

LionGold Repudiates Sale Agreement
Bass Metals Ltd (ASX:BSM) ("Bass" or the "Company") is writing to update the market on the status of the sale to LionGold Corp Ltd ("LionGold") of Bass's subsidiary, Hellyer Mill Operations Pty Ltd ("HMO") and Bass's placement to LionGold of Bass shares.
On Monday 3 September, Bass received a letter from LionGold stating that LionGold considers that the conditions precedent for completion under the Share Sale Agreement have not been satisfied and giving notice to terminate the Share Sale Agreement. LionGold did not attempt to identify which conditions precedent they considered were not satisfied. Bass considers that all the conditions precedent are satisfied and that LionGold has no basis on which to terminate the Share Sale Agreement. Further, Bass considers that by its letter yesterday LionGold has repudiated and breached the Share Sale Agreement.
Bass is taking legal advice as to its options in Australia and Singapore.
Background
As announced on 6 July, Bass and LionGold entered into the following agreements:
1. a Share Sale Agreement dated 5 July 2012 under which Bass agreed to sell and LionGold agreed to buy 100% of the shares in HMO for cash consideration of $13,500,000; and
2. a Share Placement Agreement dated 5 July 2012 under which LionGold agreed to subscribe for 58 million new Bass shares at 1 cent each for a total subscription price of $580,000.
Completion under the Share Sale Agreement is subject to satisfaction or waiver of various conditions precedent ("Conditions Precedent"). If the Conditions Precedent are not satisfied or waived on or before 31 August 2012, then either party may give notice terminating the Share Sale Agreement.
The Conditions Precedent include LionGold obtaining FIRB approval (which LionGold has confirmed it has obtained), Bass obtaining approval from its shareholders to the sale and the placement (shareholder approval was obtained on 17 August 2012) and various other conditions. LionGold completed its due diligence prior to entry into the documents – and consequently the Conditions Precedent did not include due diligence approval.
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Bass considers all the Conditions Precedent have been satisfied, and has previously notified LionGold of this. Other than a concern with one Condition Precedent which Bass has previously fully addressed, LionGold has not indicated previously (or yesterday) that it considers any particular Condition Precedent is not satisfied. If LionGold genuinely believes that a Condition Precedent is not satisfied, then Bass is surprised that LionGold has not notified Bass of this previously – Bass considers LionGold's actions in this regard are contrary to the terms of the Share Sale Agreement, and also to expected reasonable standards of good business practice.
Further, Bass notes that at a face to face meeting in Singapore on the 28 August 2012 that Mr Raymond Tan, LionGold Company Secretary and partner in LionGold's legal advisors, Robert Wang & Woo LLP, advised Bass’ Chairman and Managing Director that LionGold acknowledges it has a “legal and contractual obligation to complete the deal”. Mr Tan’s remarks were made in the company of several LionGold executives, Mr Peter Chen, Director Project Development and Director, Mr Roland Selvanayagam. The Singapore meeting had been requested by LionGold so that LionGold could explain to Bass the events surrounding the sudden departure (around 20 August 2012) of Mr Errol Smart, LionGold's Chief Operating Officer (announced by LionGold on SGX yesterday). LionGold explained that Mr Smart had been a key architect of LionGold’s gold business growth strategy and had particular knowledge of HMO. On the day before the meeting Bass had given notice to LionGold that Bass considered the Conditions Precedent were then satisfied, and at no time during the discussion at the meeting did LionGold give any indication that LionGold was having second thoughts about the transaction, or that it was dissatisfied with any aspects of the Conditions Precedent.
The Directors of Bass are surprised by the recent actions of LionGold. Whilst it remains Bass’ preference to engage with LionGold and seek to understand the motives behind LionGold's repudiation and breach of the Share Sale Agreement, Bass has also commenced the process of exploring and considering is legal rights against LionGold in both Singapore and Australia.
Bass notes that it has appraised its secured lender, RMB Australia , of the current position with LionGold. While, like Bass, RMB's preference is for the Share Sale Agreement to be completed, RMB has indicated that it is fully supportive of Bass exercising all its rights in respect of this matter.

The Board of Bass will keep the market updated on further developments.

Yours sincerely
Michael Rosenstreich
Managing Director