Chair-Face stated "I find it hard to believe that you would have seen the agreement. No matter how cryptic you want to be." I am not a lawyer but I'm doing my best to write my words carefully. I don't want anything to come back to haunt me. And in this case I feel it is best to not blurt out my source. I must be cryptic. All I can say is that I got it from the horse's mouth and I have every reason to believe that there is no arbitration clause. Can you imagine if all journalists and spies had to identify their sources so that the reader would believe them? There would be no sources!!
At any rate this "no arbitration clause" would then cause a judge to have to decide whether a delayed payment would be the basis for a decision to cancel an agreement or not. But to go deeper, a judge might look at the number of delayed payments and the reasons why they were late. Were the payments caused by unexpected/unavoidable problems or were they habitual?
Now having said that, and this is unrelated, I suppose, but the vendor certainly did transfer the ownership of the claims before the payments were required to be made. At the time of signing over the claims to the buyer he had to know that future payment delays are/would be a possibility; that delayed payments are a fact of life.
And, again, in another dimension of this issue, the vendor did have the choice to sell and transfer the claims outright (with future payments), as he did. Or he could have gone the much wiser route and optioned the claims, with the transfer of the mineral rights to be made only after all payments (and other milestones) were met.
It is not uncommon for junior explorers and mining companies, once the mineral titles are in their names, to delay or even not make subsequent payments. Those companies know full well that the vendor generally does not have the financial wherewithal to pursue such a case for years through the courts. Also, a lawyer can demand, say, a $5,000 retainer which is used up in the hours he/she takes just to learn the facts of the case. And to learn what lithium is. And what a pegmatite is. And what a claim is. And why the payment was late. Ad $$$ infinitum.
With that last word, another thought comes to mind. Provided circumstances (whether by action of inaction) don't cause the claims in question to expire(!!!?!!), it becomes a question of who has the staying, or the waiting power. Is it the complainant or the defendant who can/is willing to wait for years for a resolution? So would Luke grab an opportunity to settle with MetalsTech? In my view that would depend on two things. I expect that most of the readers of the previous sentence would have the words "cash and shares" come to mind. But perhaps even more importantly is that the second thing would be Luke's belief as to whether he can deal with and TRUST MTC management from that point forward. Trust must be earned.
And current MTC management has most certainly lost the trust of many people, especially myself. I can't speak for Luke but if I were him I would only do a deal with MTC if the board was new. New board. New deal. New share price.
For heaven's sake, how can a company with quite an attractive "billion dollar" lithium deposit just a few kilometers from a highway, plus an expected multi-million dollar cash injection from the Quebec government, have a market cap of a mere $1.53 million dollars? It costs a half million dollars just to get a company created, up and running, and with a minimal amount of cash in the treasury. I'm not sure how much cash is due from the Quebec government but I believe it is at least $1.5 million. (Someone please clarify this.)
So MTC, even with no mineral assets whatsoever, should have a market cap of the cost of creating and cashing-up a company (~$500,000) plus the expected ~$1.5 million, for a total of ~$2 million. So even with the Cancet claims registered to MTC, the current market cap assigns a zero value to that asset (as well as all the other properties). Why? Is it the $10,000,000 penalty that Luke Schuss (and partners) seek? Is it the expectation that any money received from the Quebec government will vaporize, by any number of predictable means, within a few short months?
Perhaps.
But in my view a brand new board, staffed with competent and socially-intelligent professionals, could resolve all these issues almost instantly. As I have stated before, if the current board would (voluntarily) leave, they could revel is watching their own MTC shareholdings skyrocket in value.
If I would be Luke Schuss, I would happily come to terms with a strong, well managed, and cashed-up MTC.
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