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- Dampier Gold (ASX: DAU) is seeking approximately $21 million in compensation from Vango Mining (ASX:VAN)
- In November, Dampier received a letter from Vango, saying that it will not grant any further interest to the K2 joint venture project
- Vango believed Dampier failed to satisfy the required expenditure
- However, Dampier has hit back and said that Vango has refused to approve any of its expenditure tranches or exploration budgets
- Dampier hired lawyers who today issued Vango a letter of demand
- Vango will have 30 days to make the $21 million payment
- On market close, Dampier is up 4.55 per cent, trading at 2.3¢ per share, while Vango is down 17.2 per cent, selling shares at 12¢ apiece
Dampier Gold (ASX: DAU) is seeking approximately $21 million in compensation from Vango Mining (ASX:VAN).
In November, Dampier received a letter from Vango, saying that it will not grant any further extensions to Dampier for the K2 Joint Venture project.
Under the original Binding Term Sheet (BTS), Dampier has the right to earn up to 50 per cent of beneficial and legal interest in the K2 project.
Vango believes that Dampier failed to satisfy the required expenditure during this period.
The company said it has already spent at least $245,000 on the project, which led to a 4.1 per cent interest in the K2 project.
However, Dampier has hit back and said that Vango has refused to approve any of its expenditure tranches, exploration budgets presented at numerous joint venture meetings.
Due to the above, Dampier hired lawyers from King & Wood Mallesons, who today issued Vango a letter of demand.
The letter demands a compensation payment of approximately $21 million for the losses incurred to date by Dampier. Vango will have 30 days to make the payment.
If Vango does not make the payment, Dampier has reserved its right to pursue Vango for all losses that have been and will be incurred in relation to Vango’s repudiation
This price comes after Vango’s announcement in 2014, where it estimated the K2 Mines could recover 54,000 ounces at an All In Sustaining Cost (AISC) of $1,030 per ounce and the current gold prices.
Dampier claimed that Vango repeatedly breached the BTS and the joint venture.
“[Dampier] Alleges that it has suffered and continues to suffer significant loss and damage as a result of Vango’s failure to perform the Joint Venture and its repudiation of the BTS,” The company said.
“Dampier will be relentless in its pursuit of Vango for all of its legal rights under the K2 Joint Venture and full compensation for Dampier shareholders,” Executive Chairman of Dampier Malcolm Carson told the market.
On market close, Dampier is up 4.55 per cent, trading at 2.3¢ per share, while Vango is down 17.2 per cent, selling shares at 12¢ apiece.
