Celsius Resources Ltd. said it plans to initiate arbitration to protect its 40% interest in Makilala Mining Company Inc. (MMCI), as a Philippine court considers whether to allow Equinaire Holdings Ltd. to proceed with foreclosure and the auction of the stake.
In an Aug. 12 announcement to the Australian Securities Exchange and AIM, the Australian-listed mining company said it intends to commence arbitration ahead of the Aug. 25 expiry of a temporary order of protection (TOP) issued by the Regional Trial Court of Makati City.
The dispute stems from the purported assignment of the Omnibus Loan and Security Agreement (OLSA) between MMCI and Equinaire.
Following the purported assignment of the OLSA from Maharlika Investment Corp. to Equinaire, a wholly owned subsidiary of India's Kiri Industries Ltd., Equinaire issued several notices against Celsius.
These included a notice of event of default, a notice of commencement of foreclosure proceedings and a notice of disposition seeking to initiate a public auction for Celsius' 40% interest in MMCI.
Equinaire's claimed event of default was based on a notice of relinquishment issued to Sodor Inc., according to Celsius. The company disputes both the occurrence and continuance of an event of default and Equinaire's capacity to initiate foreclosure proceedings and sell Celsius' interest in MMCI.
The Makati Regional Trial Court subsequently granted a TOP preventing Equinaire from proceeding with the foreclosure, disposition or auction of Celsius' interest in MMCI.
Equinaire has since applied to the court to lift the protection order, which would allow it to proceed with the proposed auction and sale.
Celsius said it has filed its opposition and presented verbal arguments before the Regional Trial Court against the lifting of the TOP.
The court has yet to resolve the matter. In the meantime, it has directed both parties to maintain the status quo while Equinaire's motion to lift the TOP is being assessed.
Celsius said it plans to initiate arbitration in accordance with the provisions of the OLSA to protect its interests before the current court protection expires.
