 ASX listed mineral exploration companies Metalicity and Nex...

•  ASX listed mineral exploration companies Metalicity and Nex Metals Exploration are headed for the WA Supreme Court in January

   They are fighting over whether Metalicity has completed $5 million worth of exploration work to earn a 51 per cent stake in two gold projects

   The projects at Kookynie and Yundamindra in WA's northern Goldfields contain multiple historic gold workings dating back to the 1890s

  
  

  While the potential for a significant new gold discovery is seemingly growing, discussions about a potential merger of the companies had been going on in the background.

  Metalicity had grown impatient after what it said was 12 months of discussions and pulled the trigger on September 14, when it launched a $12.8 million takeover bid.

  A week after the hostile approach, Nex Metals threatened legal action in response, alleging breaches of the joint venture agreement.

  In its most recent quarterly report released on October 29, Nex Metals released further details, claiming that it has been provided only limited access to drilling data by Metalicity.

  Nex Metals said it wanted to conduct a mineral resource estimate "which is long outstanding in Nex's view" to provide a relevant measure of the value of the project, so it could recommend to shareholders to accept or reject the offer.
  Metalicity's voting power in Nex Metals currently stands at 22.26 per cent, with the latter maintaining the advice that shareholders take no action.

  With no resolution in sight, the situation escalated again on November 16, when Nex Metals lodged a writ of summons and statement of claim with the Supreme Court against Metalicity's subsidiary Kym Mining Pty Ltd.

  A day later, Nex Metals also lodged a report of misconduct with the Australian Securities and Investments Commission.

  In response, at Metalicity's annual general meeting on November 26, Metalicity chairman Andrew Daley told shareholders the matter will be "vigorously defended".

  "At this point and for the record, let me assure you that despite suggestions by some to the contrary, expenditures supporting our earn-in are fully documented and have been independently audited," he said.

  "We will vigorously defend any attempt to suggest otherwise.

  "It has been disappointing then that the response to our offer from the Nex board has been to challenge the validity of our earn-in with haphazard and spurious legal claims."

  Mr Daley is adamant the combination of the companies "makes logical sense".

  But if the takeover does not proceed, it is a question of whether they can operate effectively as a joint venture after such a bitter boardroom fallout.

  The scene is set for a judge to sort out who ends up with the controlling 51 per cent interest.

  A Supreme Court trial has been scheduled for late January.