LONDON (Alliance News) - South-Africa focused mining company BlueRock Diamonds PLC on Friday said its former chief executive officer has agreed to halt liquidation proceedings for Kareevlei Mining Ltd.
Shares in BlueRock were up 17% at 1.20 pence per share in response to the news.
According to BlueRock, ex-chief Riaan Visser claims to be owed ZAR3.8 million (GBP215,084) relating to advances from Kareevlei Mining and a further ZAR987,525 for the use of a generator.
Kareevlei Mining is BlueRock's main operating subsidiary and Visser intended to file for its liquidation on Friday. However, BlueRock has agreed to provide a security of approximately GBP230,000 relating to Visser's claims in exchange for his removing of Kareevlei Mining from the court roll.
Visser must initiate recovery proceedings in order to receive any amount of the GBP230,000 security. A time frame for when he must initiate this proceedings has not been established.
"The alleged claims remain disputed and the applicants may initiate ordinary course recovery proceedings. Such proceedings, if initiated, are likely to last for a period of around 18 months," BlueRock said in a statement.
The money for the security has been loaned by BlueRock's directors and has a 5% arrangement fee, an interest rate of 11% per year, and will be repaid at a 2% premium for every month it is outstanding.
"I am delighted that we have removed the possibility, however remote, that the application for a provisional winding up would be granted. If Visser decides to pursue his claim further it will be dealt with in the course of a normal recovery process and we remain confident, based on legal advice, that his case is without merit," said current BlueRock CEO Adam Waugh.