Pacific Bauxite Limited (ASX: PBX) has 50:50 joint venture with the company Eight South Investments Pty Ltd (JVC). On 23 November 2018, the high court of the Solomon Islands, heard an application under the r.12.11 of the court rules. Under this, the company has claimed against its joint venture partner JVC that there were six issues which stated that the minister of mines, energy and rural electrification has acted beyond its limits which have led to the cancelling of the License PL 01/16 (PL 01/16).
Under this, if JVC is successful in any of the six issues which are claimed on it then the proceedings will come to an end with the effective return of license PL 01/16 to JVC else the proceedings will continue. These six issues which the JVC sought were as follows:
- A declaration that supports that the license PL 01/16 which got cancelled by the minister was beyond its limits.
- A forceful decision made by the minister to cancel the license
- A declaration that the license that PL 01/16 is valid.
- An order which includes that the defendants need to pay the claimant cost and reserved cost along with the certification of overseas counsel.
At present, the court’s decision is pending and will pass its decision within three months. However, it is expected that court will pass its judgment by 14 December 2018. Till then the court has asked JVC not to accept any application form from any of the directors of the mineral board and the minister. Also, they are not supposed to grant any conflicting tenements to other people apart from those who are under the license PL 01/16 until the decision of the court remains pending.
Another option available with both the companies is that they can opt for out of court negotiation and aggressively work on all available which is good faith for both the companies.
The company is a consistent negative performer. Since its inception, the performance of the company is -81.61%. The one year, five years and ten years performance of the company is -78.43%, -30.11% and -73.12% respectively.
For the year ended 30 June 2018, the company incurred a loss of $4,190,711. The balance sheet of the company is quite strong. The company holds a net asset of $2,296,863 which indicates that the company has the potential to meet its long-term obligations. The company has raised capital through the issue of shares. On the other hand, there was an increase in the accumulated loss as compared to the previous year which resulted in the net shareholder’s equity worth $2,296,863. From the operating activities of the company, the net cash outflow was $2,759,932. Under this category, the major source of cash outflow was due to the payment made to the suppliers and employees and payment for exploration and evaluation. From the investing activities of the company, the net cash outflow was $77,509. The major source of cash outflow was due to payments for property, plant, and equipment. From the financing activities of the company, the net cash inflow was $4,444,225. By the end of the year, the available cash with the company was $2,062,108.
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