LFN - $7.5M18 Feb 2018 18:10
It's probably not overly surprising that there are different views from Wolf/GRES re the LFN issue. Given that Wolf is, and has been since start of operations, in breach of its EA permit this is clearly an important area. Similarly, the impact on local residents can't be underestimated. If the case against GRES is lost then Wolf will need to find an additional $7.5M to rectify the issue; if they win then the cost is covered provided that the estimate of $7.5M is accurate and not exceeded. Anyone with experience of contract disputes have a view on this?
Dec 2017 Qtr Activities Rpt.
"Progress has also been made on a resolution to low frequency noise emissions, with input from a team of global experts on noise and acoustic treatments providing a way forward to a positive outcome for our local communities. "
"Subsequent to Quarter end, the noise and vibration management plan has been agreed with the EA, with the
solution identified from best available techniques being to re-clad the existing building structure with a proprietary acoustic panelling system at an estimated cost of up to �7.5 million."......
.............." Previously, the Company assessed the costs of ongoing LFN rectifications and announced on 17 August 2017 that it had decided to notify its lead construction contractor, GR Engineering Services Limited (GRES), of its intention to recover these costs from the �7.5 million Performance Bond under the construction contract if GRES did not take all necessary actions to do so at its own cost. Further discussions and correspondence have taken place with GRES and are ongoing in relation to achieving a resolution. The Company remains confident that the Performance Bond will be sufficient to cover the costs of implementing the LFN noise and vibration management plan"
GRES Annual Rpt 2017
"Shareholders will be aware that in August 2017, GR Engineering Services (UK) Limited (GRES UK), a wholly owned subsidiary of the Company, received from Wolf Minerals (UK) Limited (Wolf) a notice of claim and notice of intention to call on a bank guarantee of approximately $AUD 12.2 million within 21 days of the notice where GRES UK fails to rectify an alleged defect relating to Low Frequency Noise emanating from the Hemerdon Tungsten/Tin plant. GRES UK considers that Wolf�s claim is without merit and that Wolf has no grounds to pursue recourse to the bank guarantee. As at the date of this report Wolf has taken no action to call on the bank guarantee and the Company remains proactive in its willingness to engage with Wolf to resolve the matter."
PG
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