Arbitration Proceedings

RNS Number : 3240J

URU Metals Limited

06 August 2012

 



For immediate release

6 August 2012

URU METALS LIMITED

("URU" or "the Company")

Arbitration of the Zebediela Project

URU Metals Limited, (AIM:URU), the base metals and uranium explorer and development company announces that it has been notified by Southern Africa Nickel ("SAN"), a private South African Company and Umnex Mineral Holdings ("Umnex"), a South African Black Economic Empowerment ("BEE") Group, which is part of the Umbono Capital Group, its joint venture partners in the Zebediela Nickel Project, that they are serving a formal notice of arbitration against each other.

The dispute, in which both partners are citing a lack of performance in achieving deliverables under the SAN-Umnex joint venture agreement, is strictly between SAN and Umnex Mineral Holdings.  URU is not a direct party to the dispute. 

URU's interest in the Zebediela project has been vested through an agreement signed between SAN and URU (that pre-dates the SAN-Umnex agreement which is the subject of this dispute) under which URU would have first refusal over African nickel projects identified by SAN.

Over the past couple of weeks, URU's management has been actively talking with both SAN and Umnex to resolve the disputed issues, and to work towards a solution that is acceptable and equitable to all parties.  Even though arbitration is proceeding, URU will continue to work with both parties to resolve the dispute and to move forward with the project's development as originally planned.

Should the arbitrator rule that Umnex is able to terminate the SAN-Umnex agreement due to non-compliance, Umnex may have the option to purchase 100% of the Zebediela project from SAN in exchange for cash equivalent to the entire expenditures incurred to date by URU and SAN.  In that event, URU would recover all of the cash invested in the Zebediela project to date.

If the arbitrator rules in SAN's favour, the project will continue to be developed under the original agreement. 

URU cannot provide guidance at this time as to when the arbitration proceedings will commence, and the timeframe under which one could expect a decision by the arbitrators.

The arbitration proceedings will certainly have an impact on the timelines for the completion of the Pre-Feasibility Study, as outlined in the Zebediela Preliminary Economic Assessment announced  on 7 June 2012. 

URU has retained legal council to guide and protect the Company's interest in the Zebediela project and will update the market in due course once further details of the arbitration proceedings become available.

Contact details:

URU Metals Limited Roger Lemaitre, CEO	+ 1 416 892 2870
Fairfax I.S. PLC (Nominated Adviser and Joint Broker) Ewan Leggat	+ 44 207 598 5368
Daniel Stewart & Company Plc (Joint Broker) Noelle Greenaway	+ 44 207 776 6590
Ribeiro Communications Ana Ribeiro	[phone]

 

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