JOHANNESBURG (miningweekly.com) – ASX-listed Strike Resources on Friday reported that it had learnt that a court in Peru had granted an injunction restraining its local companies from working, or otherwise dealing with, most of its Peruvian mining concessions.

The company said the injunction had been made without the Strike companies having been served a notice of such proceedings and, therefore, they did not have an opportunity to present any arguments to the court.

“Based upon the information currently available in relation to the claim, Strike considers there is no basis for the injunction. Strike has instructed its lawyers to apply to have it set aside urgently,” the company said.

Strike explained that the injunction appeared to be related to a dispute regarding a 2006 agreement under which Strike subsidiary Apurimac Ferrum (AF) acquired 14 mineral concessions from Minera los Andres y el Pacífico S.A. (MAPSA), which were subject to an option in favour of Millenium Trading.

Under an option termination agreement, Millenium terminated the option to allow the transfer of the concessions to AF, and, in return, Millenium was granted the right to conduct a small-scale mining operation on one of the concessions, the identity of which was to be agreed subsequently or determined by arbitration.

AF referred the question of which concession Millenium should mine to arbitration in 2010, as agreement on that question had not been reached, Strike said.

“Millenium has brought several unsuccessful court actions seeking to establish that the fact that the identity of the concession was not agreed renders the option termination agreement invalid. It is also pursuing this line of argument in the arbitration. [However], Strike considers that there is no basis for that argument,” the company said.

Meanwhile, Strike said that the current injunction appeared to have been obtained by Minera Apu, which was not a party to the option, the option termination agreement or any other agreement with a Strike company, although it was associated with Millenium and MAPSA.

The company said that the injunction appeared to cover 84 concessions, despite the fact that the prior agreements included only 14 concessions.

“There is no basis apparent to Strike on which Apu could conceivably have any claim against these concessions,” Strike said.

Nevertheless Apu – directly and indirectly – through its legal representative also initiated and was pursuing 38 legal actions attempting to question the validity of concessions held by AF and third parties, all of which were outstanding at the Judiciary, Strike explained.

However, notwithstanding the company’s view that the injunction had no basis, Strike had decided to review its commitment to continue sole funding the advancement of its projects in Peru, and as a consequence the company would immediately act to reduce its administrative and operational expenses in Peru and would be reviewing options with regard to using its remaining cash reserves, Strike stated.

Strike owns two large-scale iron-ore projects in southern Peru namely Apurimac and Cusco.