Coal mining company, Bathurst Resources Ltd
(ASX:BRL), has been threatened with legal proceedings by L&M Coal Holdings.
Bathurst Resources says this dispute arose out of a sale and purchase agreement that the parties entered into back in 2010, as well as a related royalty deed between L&M and Buller Coal Ltd.
L&M argues that Bathurst Resources is now required to make a US$40 million performance payment under the sale and purchase agreement.
Bathurst’s view is that a failure to make a performance payment is not an actionable breach or default, under that agreement as long as royalty payments are ongoing under the royalty deed. The company also says it will defend the matter if L&M proceeds to file its case in court.
Bathurst Resources posted a net profit of $983,000 at 30 June 2016.
