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Cheers FH, I think you just about covered nearly all of the...

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LiveEagle7

602 Posts.

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31/05/17

00:24

Post #: 25004016
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Originally posted by Freehold ↑

Good, accurate (and unbiased ) summary there IMHO ...

Some other points:
Ms Higgins is the lawyer that worked on the Draft HoA for KDR. She is not the Co Sec. She commented that KDR needed to be careful about what the terms in the HoA meant eg priority of gold rights. She noted that it wasn’t clear who the parties were – there were 4. She had also used the following sentence in her correspondence: “ …subject to execution of a legally binding document”. She observed that there were unclear issues that still needed to be dealt with

It was agreed to by judge and GD that even if the HoA was executed (i.e. signed), it still unlikely to be binding. It was only an agreement to agree, and that parties would merely need to exhibit “reasonable endeavours”. “Absurd” was proclaimed.
Just because lawyers are involved doesn’t mean things can’t change.
MB plea was that a binding agreement was entered into on 4 April (and only on 4 April) – very narrow plea, according to Donaldson (GD), and therefore he was only defending based on that narrow plea.
GD stated it was a clear case of the issues covered in Master and Cameron.
GD said there was too much uncertainty for there to be a binding contract. Even if a later contract is contemplated (and four further contracts were contemplated) the prior contract must be certain and enforceable. GD had a list as long as his robe of “uncertain” points. Some that he raised were:
· Reference to Mount Holland project. What does that mean? What tenements did it cover? This was not bedded down at all. It wasn’t clear which tenements were included and some included ones were still part of JV between Montague and other parties. GD asked if MZN would even be able to define the MH project.
· Date for payment not set, although a reasonable period of time would be acceptable. To date, no payment had been made.
· VWAP calc – how was this to be done if based on 7 trading days prior to completion? There was no completion on 4 April yet this is being asserted as the date of the alleged agreement.
· How can they objectively claim they had a binding contract when subjectively, in their cross examinations, all the MZN witnesses admitted that they didn’t yet have agreement with KDR.. They all acknowledged that negotiations had not been taken to a point of conclusion. They had even moved onto to negotiating a possible alternative deal.
· Much of the wording in the “emails” used future tense i.e. we “would” propose. “I would like to finalise” i..e not finalised yet, “proposed transaction” – so agreement can’t be on 4 april.
· Correspondence existed using the phrase “At a high level, MZN would like to propose…”. Judge says “I’ve always liked that term – it means “at a remote Level”, and he smiled.
· NSR was to be based on pegmatite related production and on a defined resource. GD asked “what does pegmatite related production mean?”. And he stated it is very odd to talk about a royalty being based on a resource in the ground. Royalties are based on production, so this NSR clause is nonsensical and meaningless.
· Reference to Pegmatitic minerals – what does that encompass?
· Plethora of terms used that were undefined and inconsistently used – creates uncertainty
· Priority of Gold rights – how are gold rights and pegmatitie rights defined? What happens to minerals that are neither? How are they dealt with? Iron Ore
All of the uncertain factors served to highlight the preliminary nature of the negotiations, and certainly did not indicate an agreement near completion, let alone binding.

Other interesting sentences that came up:
We would also have a strong preference to sign a binding HoA. Not sure which part wrote this but it made it clear that signing was expected before anything would be binding.
This negotiation encompassed a complex suite of tenements, relating to mining two resources which required separation and obligations under the Mining Act. This was a long term dual commodity mining operation – absurd for this to be covered by a handful of emails.
GD stated that, if there was a binding contract, and specific performance was then demanded, how would KDR carry out performance of the contract with so much uncertainty?

GD stated that the purpose of the emails was to merely say “we’ll deal with you”
GD frequently used the word ABSURD to describe how anyone could consider the emails to be a binding agreement.

All of this matched the behaviour of MZN subsequent to 4 April.

GD noted the main implication:- if parties knew subsequent docs were to be executed (and 4 further agreements were contemplated in the draft HoA), then the HoA would not be binding. If the HoA was not binding then how could emails prior to the execution of HoA be binding?
GD finally said that for there to be an agreement, Bennett would need to re plead his case i.e. the current narrow plea would not hold up under all the uncertainty.

Expand

Cheers FH,
I think you just about covered nearly all of the 'other' technicalities there!!

I would never want to pre empt a legal ruling by a court but as Donaldson said the list of inconsistencies go on and on.

Seriously would you appeal any decision against you based on what is being publicised?
I wouldn't rule it out though.

I think some reputations are taking a hammering here and the damage could well be lasting.

10:15 in the morning, I'm not sure we'll get a ruling tomorrow but I want to be there for Bennetts closing statements.

KDR Price at posting: 48.5¢ Sentiment: Hold Disclosure: Held
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