[PHNOM PENH POST]
THE value of a Mondulkiri gold resource and an alleged breach of
contract are at the heart of a dispute between Australian miner OZ
Minerals and its former local partner, Shin Ha Mining Co Ltd.
The
two companies were part of a joint venture in the Mondulkiri
Okvau-Ochhung exploration areas in 2008 and 2009 before OZ Minerals
bought out Shin Ha’s 20 percent share of the project for US$4.6 million,
reports have said.
Shin Ha is now seeking compensation through
Australia’s legal system, claiming OZ Minerals hid the true value of the
mine prior to the buyout, according to reports.
“The fact that
OZ Minerals kept certain technical information away from Shin Ha
certainly destroyed any chance for Shin Ha to grow in its own right,”
said Nicholas Steel, a 10 percent stakeholder in Shin Ha, yesterday by
phone. OZ Minerals had “advanced independent studies” that showed as
many as 857,000 ounces of contained gold, using a one parts per million
cutoff, were in the mine in September 2008, Steel said in a previous
email.
That was more than a year before the eventual sale of Shin
Ha’s stake in the mine in October 2009, he said. In March 2010, OZ
announced it had identified 605,000 ounces of gold resources at the
Okvau site.
Steel, a former general manager for Southern Gold in
Cambodia, has claimed that OZ’s alleged refusal to share the information
was a breach of the company’s obligations to the joint venture with
Shin Ha.
OZ Minerals spokeswoman Natalie Worley responded to the
claims, saying the firm “works to international business standards
wherever it operates.”
“In this case, the company complied with
the terms of the joint venture at all times, and commercial terms were
aligned with those used in the mining industry globally,” she said.
KB
Thuraisingham, a legal advisor to Shin Ha, said the alleged actions of
OZ Minerals showed a “failure to perform by their fiduciary duties in
the [joint venture] statement.”
“We believe we have a case. Not just a case of value, but more of legal obligations that were breached,” he said.
Thuraisingham
admitted Shin Ha initially approached OZ – then operating under the
name Oxiana – about a potential sale, but only because Oxiana was
struggling with financial problems at the time. Oxiana’s inability to
assuage Shin Ha’s investors about the Australian firm’s ability to
continue its operations in Okvau prompted the sale. “They were forced by
the circumstances,” he said of Shin Ha.
The Okvau site presently
is being valued, and that conciliation between the two companies will
commence once it is complete, he said.
Worley did not respond
directly to questions from The Post as to whether or not the price
offered for Shin Ha was fair, though Steel has said Shin Ha’s 20 percent
stake in the resource would have been worth $180 million at today’s
gold prices. Beyond the value of the resource itself, Steel said Shin Ha
was given “no opportunity to judge ourselves” whether or not the sale
made sense for the company’s shareholders.
The Okvau mine, and
perhaps some additional assets, might have allowed Shin Ha to list on
any number of stock exchanges, thereby spurring significant growth of
the company and delivering greater returns for shareholders, he said.
“How can you put a value on that?” he said.
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