As we are approaching 29th May court date. I would like to raise this final discussion:
1. MZN directors alleged that they believe they had a binding contractual agreement with KDR regarding lithium rights, formed by exchanges of emails in April 2016.
On 13th April, KDR announced and in other announcements after 13th April: "However, in light of the strong interest expressed in the lithium rights at Mt Holland, Kidman has commenced a technical review on this potential, which is clearly very significant".
If an agreement had been complete regarding sale of lithium rights to MZN, why would KDR announced it would commence a technical review of lithium potential?
And after finding out Mt Holland previous drill cores at Bounty has lithium spodumene, KDR continued to announce that it will further investigate lithium potential at other locations including Prince of Wales, Texas,....and raised $20mil to drill and continue to hit spodumene. Again, my question is: if an agreement had been reached to sell the lithium right to MZN, why would KDR continue to spend huge amount of money and human resources to drill out the targets? I mean if you have sold your rusted bomb car for a token price of say $500, why would you spend say $5000 or $10000 to repair the car before you hand it over to the purchaser? It just does not make sense does it? Clearly, it all along suggests to me that the negotiation had not been complete to be called "agreement". Naturally, an agreement of this nature would involve who is funding next round of exploration, what percentage of funding and/or total amount of funding, within what time frame (how many months or how many years). There is none. Nothing whatsoever regarding this factor which is usually a major factor in a contract of this nature.
2. Second point I would like to raise in this post:
If, and I say clearly if, hypothetically if the judges find some empathy to MZN and want KDR to award MZN some compensation or damages, or whatever you want to call it. In this case, does the judge has the power to specify a particular nominal money value or percentage of the lithium that KDR must pay to MZN?
3. If the judge does have that power to specify an $ amount or % lithium right that KDR must pay to MZN, my feeling is it will not be more than 20% (given that KDR has spent so much money on drilling out the resources and given that MZN has failed so badly to claim its right to lithium as it believes it has in a timely manner and left it too too late to around 7 moths later). My calculation is:
- If the judge award MZN $3mil, $5mil, or $10mil, then KDR sp will still has scope to immediately increase 100% (double from current 38cents) within 2 days, and in 3 months later, increase up to 200% (triple from its current sp of 38cents) given that its 2nd metallurgical test result is now a clearly good result. And surely a lot more positive announcements regarding off-take agreements, Prince of Wales, Texas drilling results....
- If the judge award MZN 10% of the lithium right, then KDR sp will still perform in a similar fashion to the above scenario, maybe 80% up within 2 days and 150% within 3 months
- If the judge awards MZN 20% of the lithium right, I predict KDR sp will be up 50%-60% immediately within 2 days and will be up 100%-150% within 3 months.
4. Most likely result: KDR will win the court battle out right.
- In this case, MZN with its estimated 2.8mil cash will be completely burnt for the 2 legal case fees (including Rox case) and MZN sp will fall to near zero and suspended. MZN directors will also be suspended. KDR may launch legal suit seeking for damages which could amount to somewhere $50mil-$100mil. No one in the mining industry will want to associate with MZN directors/thugs.
All relevant discussions to the points I raise above are welcome.
5. BTW, watch out for tons of good news unleashed from KDR after this saga is finished. I say POW and Texas are monster deposits. Hold me to my words within 6 months after the court date if KDR wins the case.
6. Anyone like to comment on this note which I found from Department of Mines and Petroleum, WA.
Kidman Resources Limited – Mt Holland Project, Purpose Permit, Miscellaneous Licence 77/107, Shire of Yilgarn, Airstrip Refurbishment, 12 ha (CPS 7547/1)
Tran
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