Court dispute over $26m Davyhurst mine JV

Ora Banda Mining has accused Greenstone Resources and Ian Gandel’s Riverina of blocking the final sign off for the junior miner’s $26 million joint venture deal with Wesfarmers Chemicals.

Perth-based Ora Banda and its subsidiary, Carnegie Gold, have lodged a writ in the Supreme Court of Western Australia, naming Victoria-based Riverina Resources and West Perth junior miner Greenstone Resources as defendants.

In the writ, Ora Banda claimed Riverina and Greenstone have unreasonably withheld their consent as third parties to the Davyhurst tenements west of Kalgoorlie, which are subject to a $26 million joint venture with Wesfarmers Chemicals.

Under a 2007 sale agreement, Riverina and Greenstone agrees to sell the Davyhurst tenements to Ora Banda and Carnegie while still keeping the rights to mine and treat nickel ore on site, according to the writ.

No party could transfer or dispose its rights and obligations over the tenements without written consent of the other parties under the 2007 agreement, the writ said.

Carnegie and Ora Banda entered a farm-in agreement with Brenahan Exploration and Australian Light Minerals, companies in the Wesfarmers Chemicals, Energy and Fertilisers division, over the Davyhurst tenement package in October 2023.

Ora Banda will sell 65 per cent of its mineral rights on the Davyhurst tenements for $26 million cash consideration and 2 per cent royalty under the agreement, but subject to third-party consents and entry into deeds of covenant.

The company's ASX announcement in October said the conditions attached to the farm-in agreement must be waived by April 30 2024, otherwise either party could withdraw from the deal.

In the writ, Ora Banda alleged Riverina and Greenstone unreasonably withheld their consent to the proposed transaction despite months of communication between the parties.

Ora Banda managing director Luke Creagh wrote to Riverina chairman Ian Gandel about solicitors preparing documents needed for the required third party consents on December 4, according to the writ.

Ora Banda further claimed Mr Gandel replied to say the matter would be dealt with Riverina’s lawyers in the new calendar year, but he failed to respond when Mr Creagh asked for an update on January 9.

In the writ, Ora Banda claimed a reasonable time has passed since the first request in early December.

It has been further alleged the defendants did not provide a deed of covenant by February 14 despite telling Ora Banda it would be provided later that day, the writ said.

Ora Banda claims damages and for the court to order Riverina and Greenstone to consent to the proposed transaction.