Metals X has issued a stern warning to Tanami Gold claiming it would be financially unwise to accept Northern Star Resources' bid for the Central Tanami gold project over its own proposal.
Metals X appealed directly to the solicitors of Tanami, saying it was ready, willing and able to settle on its original bid of $11 million in cash and 4 million shares for a 25 per cent stake in the Central Tanami project in the Northern Territory.
“If Tanami fails to complete that transaction (Metals X) will claim damages against Tanami which it alleges are greater than the difference between the price for Central Tanami in the Northern Star heads of agreement and in the Metals X heads of agreement,” the correspondence issued to Tanami stated.
The Tanami board said it denied the legal and factual basis of Metals X’s claims, and was seeking legal advice on the matter.
Metals X was quick to fire back with a claim that the deal conflicted with a legally-binding and enforceable agreement between itself and Tanami, and it would take action to uphold its rights and entitlements.
Tanami’s largest shareholder, Allied Properties Resources, which is chaired by Hong Kong lawyer Arthur Dew, has previously confirmed that it intends to vote in favour of Northern Star’s proposal.
Tanami shares were unchanged at 2.9 cents per share, while Northern Star shares lost 3.6 per cent to $2.26 each at 11:20am.
Metals X shares also dropped 1.1 per cent to $1.29.