Eurogold Ltd and subsidiary, Eurogold Holdings (Bermuda) Ltd, have accepted a $7.95 million settlement from Oxus Holdings (Malta) Ltd and Oxus Gold Plc, after OHML and Oxus terminated an agreement to buy Eurogold's Ukrainian gold assets.
Perth-based gold explorer Eurogold and EHBL commenced proceedings against Oxus and OHML for damages in the Federal Court in 2006, arising from the termination by OHML and Oxus of the asset sale agreement signed that year.
Without accepting any liability, Oxus has now agreed to settle the dispute and pay Eurogold $7.95 million, comprising cash of about $6.78 million and Oxus shares to the value of approximately $1.17 million.
Of the cash component, $5.06 million is payable on or before March 31, 2008, and the balance of $1.72 million by May 6, 2008.
Eurogold said it would pay litigation funds provider IMF (Australia) Ltd 30 per cent of the total proceedings received from the settlement.
Eurogold managed to dispose its Ukrainian gold mining assets to Resource Invest LLC for US$5 million in July last year, of which US$2 million has been received and the balance of US$3 million is due from RIL upon a regulatory milestone relating to the advancement of the Saulyak Gold Project being met.
Upon receipt of the US$3 million from RIL, settlement with Oxus and after payment to IMF, Eurogold said its cash position would be approximately $10 million.
The company's combined cash and Oxus share holding value will be approximately 3.5 cents per share (based on today's price of Oxus shares).
