EnviroGold launches legal action

West Perth-based EnviroGold's wholly owned subsidiary, Las Lagunas, has today lodged a statement of claim against Intermet Engineering in the Federal Court.

The claim is seeking damages against Intermet for $US9 million and $A5.51 million for breach of contract and misleading and deceptive conduct in relation to the provision of engineering and procurement services for the Las Lagunas gold tailings project in the Dominican Republic.

Intermet has notified Las Lagunas of a claim for $1.3 million unpaid fees.

Las Lagunas terminated Intermet's contract on November 12 2008.

Executive chairman of EnviroGold Brian Johnson said that construction of the project would not now be able to commence until October 2009 at the beginning of the next dry season in the Dominican Republic, and after outstanding engineering and final construction costings are completed.

Project financing by Macquarie Bank is able to be drawn down until March 31 2010.

Establishment of the proposed joint venture to undertake the project will be deferred until a higher level of certainty is reached in relation to project construction costs and forward gold prices.