Vancouver – A recent court decision in the Democratic Republic of Congo (DRC) has dealt a major blow to Africo Resources (ARL-T, AFCRF-O) concerning its recently announced 75% ownership in the Kalukundi copper-cobalt project.
In a court case between Akam Mining and DRC state mining company La Generale des Carrieres et des Mines (Gecamines), which owns 25% of Kalukundi, a declaration was tabled accepting Akam’s claim it had purchased a 75%-interest in the Kalukundi property for US$600,000 in relation to a recent US$3-million default judgment against Africo in favour of an ex-employee.
Africo, which had already launched an appeal to the earlier US$3-million judgement, had its DRC legal team lodge an immediate appeal of Akam-Gecamines case hoping to have the decision set aside. Africo’s lawyers also plan to file a complaint with the Supreme Court of the DRC for judicial misconduct against the court in Lubumbashi, which if successful would nullify all the judgments against the company.
As a result of the recent court rulings and resulting uncertainty to property title, Africo and its underwriters have withdrawn a planned $130-million financing that was earmarked to finance equity requirements for development of Kalukundi.
The Kalukundi deposit sits within the Katangan Copperbelt, in the Kolwezi District of Katanga Province in southeastern DRC. The project hosts proven and probable reserves of 7.8 million tonnes at 2.37% copper and 0.69% cobalt with a bankable feasibility study indicating positive economics on a proposed open pit operation.
Africo was launched just last December, spun out of Rubicon Minerals (RMX-T, RBY-X) to hold its African assets and specifically bring forward expedited development of Kalukundi.
Developments in the case will likely be closely monitored by a number of companies active in the DRC, looking for signs that the country’s effort to improve its stability level does not regress.
After being halted for the news, shares of Africo closed down $1.00 upon resumption of trading, off 26% at $2.80 apiece on volume of over 1.8 million.
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