| Sundance must pay geologist $5m |
Sundance Resources has lost a long-running and expensive battle with the geologist that secured its African iron ore project.
The Supreme Court has ordered Sundance to pay David Porter more than $5 million in lieu of options to which the former employee had argued he was entitled.
Sundance said it was considering its legal options in the wake of the decision, which will eat substantially into the company’s cash reserves if upheld.
Sundance had about $7 million left at September 30, and raised another $7 million in convertible notes in early November.
The dispute dates back to 2006, with Mr Porter arguing that Sundance broke an agreement that he receive 30 million options in the company as part of a consultancy negotiated with Sundance and late company promoter Adam Rankine-Wilson.
The Supreme Court dismissed Mr Porter’s first legal attempt to enforce the agreement in 2013, but ordered a retrial in August.
Mr Porter had argued he pegged the Mbalam deposit in 2004, then brokered an early 2006 deal to sell it to Sundance, then under the control of Mr Rankine-Wilson.
The sale was accompanied by large issues of stock to Sundance backers, including 100 million options exercisable at 3˘.
Mr Porter’s case hinged on claims a verbal deal was struck in June 2006 with Mr Rankine-Wilson and Sundance’s then chairman John Corr that he be given the three-year options for consulting to Sundance and helping it get settled in Cameroon.
In November that year a new board headed by George Jones took control of the company and Mr Porter was told the company would not be executing the consultancy deal.
Sundance shares last traded at 1.2˘.
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