Baraka unwinds deal over key iron project ahead of meeting to roll board
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Baraka Energy & Resources has tidied up a key contract ahead of a crucial meeting today.
Gold miner Cervantes Corporation (ASX:CVS) has agreed to give up fees and rights it had over one of Baraka’s (ASX:BKP) two projects — an iron sands venture in the Philippines.
In exchange, Cervantes gets a $900,000 loan which is interest-free for two years.
Cervantes brought the project to Baraka in 2012 — an arrangement disclosed in the company’s annual report in 2015 — in exchange for certain fees and rights over profits.
Cervantes said it expects to repay the loan earlier on the back of gold projects in Western Australia.
The companies said the decision was made at a joint meeting of the boards: Colin and Justin Vost are directors of both companies.
An extraordinary general meeting today will decide Baraka’s future.
GTT Ventures wants to remove the board and replace it with Jason Brewer, Christopher Zielinski and Patrick Glovac.
GTT is accusing the Vosts in particular of paying themselves too much and tying the company up in non-performing loans to other businesses they sit on the boards of.
Colin Vost told Stockhead earlier in the week that he didn’t want to defend the claims point by point and the matter was better resolved through private discussions rather than publicly.
He says GTT is being opportunistic, as Baraka have just closed the book on years of regulatory and legal problems.
GTT lost a bid to have the Takeovers Panel issue interim orders “restraining alleged associates from voting or selling shares or converting options and orders restraining Baraka’s board from taking certain actions”.
Baraka shares have risen this year from 0.1c to a high of 0.7c. The company went into a trading halt ahead of the meeting, with its shares paused at 0.6c.