Vancouver — A recent court decision in the Democratic Republic of the Congo (DRC) has dealt a major blow to Africo Resources (ARL-T, AFCRF-O) concerning its recently announced 75% ownership in the Kalukundi copper-cobalt project.
In a case between Akam Mining and DRC state mining company Gnrale des Carrires et des Mines (Gcamines), which owns 25% of Kalukundi, the court accepted Akam’s claim that it had purchased a 75% interest in the Kalukundi property for US$600,000 in relation to a recent US$3-million default judgment against Africo in favour of an ex-employee.
Africo, which had already launched an appeal of the earlier US$3-million judgment, is also appealing the Akam-Gcamines decision. Africo’s lawyers also plan to file a complaint with the Supreme Court of the DRC for judicial misconduct against the court in Lubumbashi, which, if successful, would quash all the judgments against the company.
As a result of the recent court rulings and resulting uncertainty to property title, Africo and its underwriters have withdrawn a planned $130-million financing that was earmarked to finance development at Kalukundi.
The Kalukundi deposit sits within the Katanga Copperbelt, in the Kolwezi district of Katanga province, in southeastern DRC. The project hosts proven and probable reserves of 7.8 million tonnes at 2.37% copper and 0.69% cobalt with a bankable feasibility study indicating positive economics on a proposed open-pit operation.
Developments in the court case will likely be closely monitored by a number of companies active in the DRC, looking for signs that the country doesn’t backslide in its efforts to improve stability.
Africo was launched in December, spun out of Rubicon Minerals (RMX-T, RBY-X) to hold its African assets and expedite development of Kalukundi.
After being halted for the news, Africo shares closed down $1.00 upon resumption of trading, off 26% at $2.80 apiece on volume of over 1.8 million shares.
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