A Northern Star Resources subsidiary has sued Grange Resources and Vox Royalty Australia over a dispute relating to the Red Hill deposit in the Kanowna Belle mine area.
A Northern Star Resources subsidiary has sued Grange Resources and Vox Royalty Australia over a dispute relating to the Red Hill deposit in the Kanowna Belle mine area.
Kanowna Mines Ltd has lodged a writ in the Supreme Court of Western Australia, naming Tasmania-based Grange Resources Ltd and Denver-based Vox Royalty's Australian subsidiary as defendants.
In the writ, obtained by Business News, Kanowna Mines alleged Grange Resources breached a deed relating to royalty rights over Red Hill when the latter assigned its royalty to Vox.
Northern Star is the ultimate holding company of Kanowna Mines.
Grange was entitled to receive a royalty over gold or silver extracted from Kanowna Belle gold mine in Kalgoorlie, which Kanowna Mines became a registered holder of, according to the writ.
Kanowna alleged, in the writ, that it had the first right of refusal if Grange wanted to assign its royalty over Red Hill to a third party, under the deed the parties signed in 1994.
However, Kanowna claimed that Grange failed to offer to assign the royalty to Kanowna when it entered a deal with Vox for $8 million cash consideration in 2023.
It is alleged that Grange purported to assign the royalty to Vox within five minutes of sending a notice of intention to Kanowna, failing to advise Kanowna of the full details, according to the writ.
Kanowna claimed, in the writ, that the notice of intention, Grange said the terms of the transfer was for Vox to acquire a portfolio of nine royalties for a cash consideration of $6.75 million and non-cash consideration of ongoing royalty-related services for three years.
In a statement to the Toronto and New York stock exchanges, Vox Royalty confirmed its wholly-owned subsidiary in Australia had been served with the Supreme Court of WA writ.
"Vox Australia acquired the Red Hill royalty as part of a portfolio of nine royalties from the first defendant for a combination of A$6,750,000 in cash and non-cash consideration comprised of Vox providing ongoing royalty related services to the first defendant," the statement reads.
"Vox’s position is that the purported right of first refusal did not apply in the circumstances, and will take all appropriate steps to defend the action."
Grange Resources has been contacted for comment.
