Fairstar facing potential legal action

Fairstar Resources Ltd is facing potential court action from Findlay & Co Stockbrokers (Underwriters) Pty Ltd, for the alleged failure to pay $4.5 million for advisory work costs related to a takeover.

The payment, either through cash or shares, is allegedly pursuant to a mandate agreement made in June last year between both companies in relation to Fairstar's off-market takeover bid for Golden West Resources Ltd.

Findlay is also seeking damages for breach or breaches of the agreement by Fairstar.

Findlay & Co have notified Fairstar that it has issued a Writ of Summons in the Supreme Court of Western Australia, however Fairstar said it has yet to receive the notice.

In a separate statement, Findlay said it will continue to explore opportunities for the commercial settlement of the dispute before serving the writ.

Fairstar said it will defend the action.