Geoff Jones says no final dividend will be declared on the back of uncertainty around the outcome with Wolf Minerals.

GR Engineering to continue Eastern, Wolf fights

Friday, 25 August, 2017 - 14:57
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GR Engineering Services says it will continue to pursue legal action against Eastern Goldfields over its work at the Davyhurst operation, while also revealing it would defend Wolf Minerals’ $12.2 million claim notice over a project in England.

Perth-based GR Engineering said today it would continue to pursue legal proceedings against Eastern for the recovery of an alleged $9.9 million owed to it for work on Eastern’s Davyhurst gold processing facility.

“GR Engineering will closely monitor any developments in relation to Eastern’s financial position,” it said.

The local contractor also said it considered Wolf’s recently announced $12.2 million claim notice against the company to be without merit, and that Wolf held no ground to pursue recourse to the bank guarantee.

Wolf is claiming that GR Engineering is liable for a low-frequency noise at its processing facility at its Hemerdon tungsten-tin mine in England, which was developed by GR Engineering in 2015.

“GR Engineering notices that there has been no call on the bank guarantee and has sought to engage with Wolf to address the claim notice in the short term,” it said.

“GR Engineering has notified its insurers at Wolf’s request and denies all liability in respect of the claim notice.”

The company said it had received about 97 per cent of the contract sum, but held accounts receivable of about $5.3 million.

GR Engineering reported a 33.1 per cent slide in net profit for the 2017 financial year to $12.9 million, with revenue down 6.5 per cent to $238.7 million.

Managing director Geoff Jones said due to the uncertainty of the issue with Wolf, the company had elected to temporarily suspend its dividend policy, with no final payout declared for FY17.

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