Last Friday, June 7, Kidman Resources [ASX:KDR] and Marindi Metals [ASX:MZN] both entered into a trading halt. The cause? A decision on a legal battle fought in late May.
What happened to Kidman Resources and Marindi Metals ?
A three day trial from the 29 to 31 May that played out in the WA Supreme Court has finally reached a verdict. Kidman and Marindi were embattled in a dispute over rights to lithium in a bungled agreement. Marindi claimed that it had an agreement with Kidman to acquire the rights to the project located at Mt. Holland. The site includes the Earl Grey deposit, the second largest lithium deposit in WA.
Late last Friday the decision was handed down with the judge filing in favour of Kidman. Justice Martin explained that there was no binding and enforceable agreement. He agreed with Kidman’s defence that the conversation through email and text messages was at best ‘an agreement to agree’.
A big win for Kidman, reflected by their 17.74% rise in this morning’s trade. Meanwhile Marindi has fallen 12.5% in the same period.
What next for both companies’ shares?
Kidman, naturally pleased with the result, has secured a big win. Managing Direction, Martin Donohue said,
‘We can now focus the attention of our entire leadership team on the fast-tracked development of Earl Grey, and other projects within our portfolio, for the benefit of all shareholders.’
The company can now take advantage of the large lithium deposit. The metal has been going gangbusters lately, following strong demand for battery production.
As for Marindi, well the news certainly has soured their prospects. The company is no doubt disappointed, and is considering its options. However, the proceedings are still being finalised and an appeal could be possible.
Whether Marindi cut their losses or consider an appeal will be the ultimate decision.
Junior Analyst, Money Morning
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