PERTH (miningweekly.com) – The gloves have come off in the battle between ASX-listed KBL Mining and its creditor Kidman Resources, with KBL on Thursday launching legal proceedings against Kidman in the New South Wales Supreme Court.
Earlier this month, Kidman issued an event of default on a A$12.6-million debt, which was secured against all of KBL’s assets, including its operating Mineral Hill base metals mine and its Sorby Hills lead/silver deposit, in Western Australia.
Kidman appointed business recovery accountants to undertake an immediate review of KBL’s current financial position, despite KBL’s insistence that the company was not in financial straits.
With its application to the Supreme Court, KBL was hoping that Kidman’s event of default notice would be declared invalid, and that the company would be proven solvent.
Furthermore, KBL was hoping that the Court would prevent Kidman’s investigator from gaining access to KBL’s records and premises.
KBL was also claiming an unspecified amount in damages.
Since acquiring the A$12.6-million debt from Capri Trading earlier this year, Kidman has made significant waves for KBL, including attempting a board spill and launching litigation against KBL and two of its directors in an effort to prevent a noteholder meeting in which KBL would have amended the terms for its convertible notes.
If KBL was able to repay the loan by its due date, the acquisition of the loan would be wholly reversed, meaning that Capri Trading would be repaid while Kidman would not receive a dime.
However, if KBL defaulted under the loan agreement, Kidman would have the right to enforce security over and gain control of all KBL’s assets.