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Firefinch, Morila served with arbitration notice over payment dispute

Morila mine, in Mali

Morila mine, in Mali

27th May 2024

By: Marleny Arnoldi

Deputy Editor Online

     

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ASX-listed Firefinch has received a notice of arbitration from mining services contractor Enterprise Générale Traoré et Frères (EGTF), in Mali. 

EGTF also named Société des Mines de Morila (Morila) as a respondent in the arbitration notice.

Firefinch explains that the notice is related to Morila’s purported failure to pay amounts under certain outstanding invoices to EGTF further to a mining services contract between the companies.

EGTF is claiming at least A$31.8-million from Morila.

Firefinch maintains that EGTF’s claim against Firefinch is without merit, including because Firefinch is not a party to the aforementioned mining services contract nor otherwise bound by arbitration provisions it contains.

There is also no agreement between Firefinch and Morila that would require Firefinch to meet Morila’s debts or other liabilities.

Firefinch owns 80% of the Morila joint venture, which operates the Morila openpit gold mine in Mali.

EGTF first mobilised equipment for mining and haulage to the mine in May 2021.

Firefinch says it intends to vigorously defend itself against any claims made by EGTF pursuant to the arbitration notice with the assistance of international arbitration specialists.

The company will also seek to recover any costs incurred as a result of these proceeds from EGTF.

Firefinch has been undergoing a restructure since its shares were suspended from trading on the ASX in mid-2022 and has been trying to sell its interest in Morila to a party better suited for the project’s ongoing development and capital requirements.

Firefinch stopped providing funding to Morila in November 2022, with a sale process subsequently having been announced on December 14, 2022. The sale process remains in progress.

The Mali Minister of Mines told Firefinch in August last year that it would not approve any deed of sale of Firefinch’s interest in Morila unless Firefinch resolves issues relating to the Morila gold mine.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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