Celsius Resources Ltd. said it is contesting attempts by Equinaire Holdings Ltd. to foreclose on its 40-percent interest in Makilala Mining Company Inc. (MMCI), rejecting claims that it had defaulted under an Omnibus Loan and Security Agreement (OLSA).
In a disclosure to the Australian Securities Exchange and the London Stock Exchange's AIM market, the Australia-listed miner said Equinaire issued three notices on Friday, July 17: a Notice of Event of Default, a Notice of Commencement of Foreclosure Proceedings, and a Notice of Disposition seeking a public auction of Celsius' stake in MMCI.
Equinaire claimed that a Notice of Relinquishment issued to Sodor Inc. constituted an event of default under the OLSA, providing grounds to enforce the security agreement and foreclose on Celsius' equity interest in MMCI.
Celsius rejected the allegation, saying no event of default had occurred and questioning Equinaire's authority to initiate foreclosure proceedings or dispose of its interest in the Philippine mining company.
"The company refutes the occurrence of an Event of Default and the capacity of Equinaire to initiate a foreclosure process and sell its interest in MMCI," Celsius said, adding that it would "protect its interests to the fullest extent of the law."
The dispute follows the June 9 assignment of the OLSA by the Maharlika Investment Corp. (MIC), the Philippines' sovereign wealth fund, to Equinaire, a wholly owned subsidiary of India's Kiri Industries Ltd.
At the time, Kiri said the acquisition of the loan was a strategic step toward securing preferential copper ore and concentrate supply from MMCI for the copper processing facility being developed by Indo Asia Copper Ltd.
"The acquisition of the loan represents a precursor transaction that is expected to enable the Group to benefit from off-take arrangements, ensuring preferential supply of copper ore/concentrate from Makilala Mining Company Inc. for its upcoming copper facility," Kiri said.
MMCI is developing the Maalinao-Caigutan-Biyog Copper-Gold Project in Kalinga province, one of the country's largest undeveloped copper-gold deposits.
Celsius said it would provide further updates as developments warrant, in line with its continuous disclosure obligations.
