DNI Metals settles Vohitsara dispute with Cougar
DNI METALS Inc. has signed a settlement agreement with Cougar Metals NL. In light of the settlement, the arbitration initiated by Cougar against DNI scheduled to be heard from Sept. 24 to Sept. 28, 2018, will not proceed.
The settlement brings the arbitration with Cougar to an end, and provides needed certainty to the company and its shareholders. The settlement will allow DNI to move forward with the unhindered development of its Madagascar graphite projects.
Dan Weir, DNI’s chief executive officer, commented: “DNI’s primary focus is to build a pilot plant to get into graphite production from the Vohitsara property as soon as possible. Having the arbitration uncertainty out of the way is a very positive step. When the pilot plant is built, management expects that there will be more than enough cash flow to pay the quarterly payments to Cougar. DNI’s drill results confirm that the Vohitsara property has significant potential for long-term production. Management considered the cost of the settlement was reasonable compared to the size of Cougar’s claims, one of which was $6-million (U.S.) per year for the life of the mine.”
Details of the settlement:
DNI will pay to Cougar:
- Eight quarterly payments of $250,000, starting six months from the settlement date or 14 days after DNI’s next successful financing;
- Two additional payments of $250,000 will be made in addition to the third and fourth quarterly payments mentioned above.
In addition, no security over the Vohitsara property was granted to Cougar. However, if DNI sells an interest in the Vohitsara property of more than 50 per cent, up to $1-million of the net proceeds of the sale will be paid toward the balance owing to Cougar. In that event, if there is still additional monies owing to Cougar, DNI will skip the next two $250,000 payments.
The settlement includes confidentiality obligations on both parties.
DNI’s expert legal team, led by McMillian LLP, was instrumental in settling this case.
We seek Safe Harbor.
John Arthur Carter, Paul L Hart, Brian Michael Howlett, Keith Charles Minty, Daniel John Weir