LONDON (Alliance News) - Hunter Resources PLC said Tuesday that it has been working on reaching an agreement with the vendors of the Pampamali project in relation to it exercising its option to take a 51% stake in Pampamali.
Back in March, the company warned it had legally exercised its option for the stake, but had not reached an agreement with the vendors as they continued to obstruct the legal process in Peru.
As a result the company commenced formal arbitration proceedings through the American Chamber of Commerce in Peru.
It has also tried to agree the legal formalities of transferring the Pampamali tenements to a new locally incorporate company.
Hunter Resources said it currently has a draft agreement in hand, but said there is no certainty this will be finalised and executed as a binding contract.
The company warned that if the vendors fail to transfer the tenements to the holding company by July 4 its shares will be suspended from trading July 5. If this happens, it will remain suspended until this happens or another transaction is completed, and if this is not done within six months its trading on AIM will be cancelled.
Hunter warned that, if no significant progress is made with the vendors, it made decide it is best to withdraw from the joint venture and is considering its options in this regard. If it does decide to withdraw, its shares will be immediately suspended.
It is also actively reviewing several alternative projects.
Hunter is currently finalising its accounts for 2015 and expects to announce them before the end of June. Due to the arbitration with the vendors and delays in transferring the tenements, its working capital has become constrained, and it is considering options for additional funding if required.
Shares in Hunter Resources were down 5.3% at 0.180 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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