Jusuf Merukh named in dispute with AG Armeno

Jusuf Merukh, a former partner of Bre-X Minerals at the Busang project in Indonesia, is once again making waves in Canadian mining circles.

The Indonesian mining promoter had previously attempted to sue Bre-X for having excluded him from the Southeast zone “discovery” at Busang; the action was dropped when it was learned that the Southeast zone was a hoax. Now Merukh is embroiled in a legal dispute with Vancouver-based AG Armeno Mines & Minerals (AGM-V) related to the Batu Hijau copper-gold project on the Indonesian island of Sumbawa.

Operator and 45%-owner Newmont Mining (NEM-N) is developing a huge mining complex at Batu Hiaju, with some of the US$1.9 billion in financing being provided by its Japanese partner. Merukh is Newmont’s minority Indonesian partner.

In early June of this year, AG Armeno reported it had entered into a letter agreement with Merukh and PT Pukuafu Indah for an option to acquire an indirect 18% interest in Batu Hijau. To exercise the option, AG Armeno was required to issue 50 million shares and pay US$2 million cash.

Bedo Kalpakian of AG Armeno says Merukh and his company made the following representations: that they had “good and sufficient right and authority to enter into and to complete the letter agreement”; that to do so “would not violate Indonesian law or regulations”; and that there were no outstanding obligations that would interfere with completion of the agreement.

Soon afterward, however, Merukh and PT Pukuafu Indah repudiated the agreement, prompting AG Armeno to file a suit seeking damages for breach of contract. The legal action filed in the Supreme Court of British Columbia alleges that Merukh and PT Pukuafu Indah “misrepresented their right and authority to enter into the letter agreement.” The company also is seeking damages for this alleged “misrepresentation.”