Metalicity is knocking on Nex’s door for JV expenditures
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Metalicity has issued takeover target and Kookynie and Yundamindra joint venture projects partner Nex Metals with non-payment notices totalling $1.28m.
The notices relate to cash calls for Nex’s share of approved expenditure carried out on the two JV projects.
Metalicity (ASX:MCT) noted that the first non-payment notice was made on 11 March 2022 in relation to a cash call of $188,618 which Nex Metals Exploration (ASX:NME) had disputed – a position that the company said was unsustainable.
The company explained that the proposed program and budget was approved by vote at the reconvened Management Committee meeting on 8 March 2022 which MCT says Nex failed to attend, leaving the budget to be approved in accordance with the JV agreement.
A second non-payment notice was then sent to Nex for its share of approved expenditure for the Kookynie and Yundamindra JVs totalling $989,712 and $101,464 respectively that were due on 18 March 2022.
It added that these non-payments by Nex constitute default events under the terms of the farm-in and JV agreement between the two companies.
“The non-payment by Nex Metals strongly supports our view that Kookynie and Yundamindra Joint Venture should be consolidated into ownership by a single entity,” managing director Justin Barton said.
“This is not only to keep this project going forward, but also because we believe that progressing under one focussed and qualified management team that can actually progress the project is the best way to realise the potential of the project sooner for all shareholders.
“Metalicity is the major partner in the JV, has been managing the project and funding all of the expenditure to date, and has the management and capabilities to continue progressing the project.”
Metalicity had made an offer of 4.81 MCT shares for every NME share back in September 2021 in a bid to secure complete control over the Kookynie and Yundamindra JV gold projects.
This has been extended several times with the company currently holding a 32.76% stake in Nex.
The bid is currently open until 1 April 2022.
This article was developed in collaboration with Metalicity, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.