MZI Resources (ASX: MZI) has agreed to settle its legal dispute with Stirling Resources over certain tenements on the Tiwi Islands and the Northern Territory as well as the disagreement with DCM DECOmetal.
MZI Chief Executive Trevor Matthews said the settlement represented another milestone as it made the transition to being a substantial mineral sands producer at its flagship Keysbrook Project in Western Australia.
"The resolution of this matter not only provides certainty over the ownership of our mineral sands assets on the Tiwi Islands and the Northern Territory, but also resolves an outstanding dispute with a major shareholder of the company," he said.
"It also allows us to be fully focused on completing the funding and construction of Keysbrook, which is set to generate strong shareholder returns."
Deed of Settlement
- MZI will issue 78,717,747 shares to Stirling and pay Stirling $1 million on a deferred basis and interest of 10% on that amount payable at six monthly intervals;
- Stirling will execute transfers of the Tiwi Tenements to MZI, and MZI will continue to assume all liabilities in respect of its activities on those tenements from May 2009. This was one of the terms of the original agreement reached between the two companies in May 2009, as varied on 15 October 2010;
- Stirling will receive a 0.5% gross royalty from the Keysbrook project mineral sands production limited to the currently approved project area.
- An Agency Agreement between DCM DECOmetal GmbH and MZI is terminated with no amounts payable by MZI;
- Stirling will not, for a period of 12 months from the date of MZI shareholder approval, requisition a general meeting of MZI shareholders to change the composition of the MZI board or encourage any other person to do so;
- Stirling undertakes that, upon MZI obtaining secured debt funding of at least $40 million, it will for a period of 24 months from shareholder approval, vote in favour of any resolution recommended by the directors of MZI which concerns or facilitates the funding of the Keysbrook Project or the reconstruction or reorganisation of MZI for the purpose of funding or facilitating the funding of the Keysbrook Project; and
- Each party releases the other from any further obligations under the Original Agreement, except as set out above.
The settlement is subject to MZI and Stirling Resources obtaining any necessary shareholder approvals by 30 October 2013. The settlement is also subject to the registration of the transfers of the Tiwi Tenements.
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