UK-based global miner London Mining has announced that China Global Mining Resources Limited (CGMR), a subsidiary of the China Global Mining Resources (BVI) Limited joint venture, has received a claim regarding the payment of a deferred consideration for the purchase of a processing plant in Sudan. CGMR is an equal share joint venture between London Mining and Basin Precious Minerals Inc.
According to a London Mining statement, the claim relates to the timing for payment of the deferred consideration of RMB 120 million (US$17.48 million) payable to Mr. Lu Benzhao and Ms Lu Tinglan, the sellers, under the terms of CGMR's acquisition of the Chinese company Nanjing Sudan Mining Company Ltd (Sudan) in April 2009, whose sole asset was the Sudan processing plant.
The sellers are seeking immediate payment of the deferred acquisition consideration, London Mining said, adding that CGMR believes the payment is only payable to the extent of available cash within the CGMR JV as stipulated by the equity transfer agreement of Sudan and therefore is not payable at this time.
The sellers, in addition, are seeking liquidated damages for late payment of the deferred consideration of US$33 million in total plus costs. The claim is to be determined through arbitration within the next six months.