Mineral Resources, Kiernan start stoush

Proceedings between Mineral Resources and its former chairman Michael Kiernan have started today over alleged misleading claims prior to the collapse of Monarch Gold Mining Company.

Mineral has today asked the state's Supreme Court to permit an amendment to a statement of claim it has lodged to include the actions of Territory Resources, a company Mr Kiernan used to chair.

Bibra Lake-based Mineral claims prior to its $2.5 million investment in Monarch, Territory's $4.5 million spending spree in Monarch had artificially supported the latter's share price prior to its collapse in July 2007.

Additionally, it is understood that Mr Kiernan had agreed to buy back the Monarch shares at a later date, a commitment that had not been met.

Mineral is also seeking a return of $2 million it lent to Monarch through an equipment financing deal.

Mineral was carrying out the crushing contract for the Davyhurst mine before heavy losses forced Monarch to suspend production in early 2008. Mineral was around one year into the three-year contract.

Mr Kiernan has reportedly lodged a counter claim against Mineral.

A trial date has not been set.