A ruling by an Ethiopian Supreme Court has reduced the potential financial impact of legacy legal issue affecting KEFI Minerals plc (LON:KEFI) to US$600,000 from US$12mln.
The claims for damages related to impact of exploration field activities on the Tulu Kapi gold project from 1998 to 2006, which pre-dated the company’s involvement with the property.
They action was brought 2014 by “certain parties” outside the district who have now been removed from the list of plaintiffs, the company said.
The Oromia Regional Supreme Court rejected 95% of the claims as “having no basis in fact or law”, which led to the reduction in the liability faced by the mine developer, KEFI said in an update to the market.
CLICK HERE: For a daily round-up of all the Proactive news
It confirmed it had appealed to the Federal Supreme Court querying the remaining sum stating as it believes it settled all obligations when the matter was originally closed by the land owners and occupiers. The case will be heard in the next two years.
Chairman Harry Anagnostaras-Adams said: "It is pleasing that the legacy issues we inherited on acquisition of Tulu Kapi are being dealt with as one would expect.
“This applied to the inherited Reverse VAT tax liability KEFI had paid and has now begun to be reimbursed - and is now also applicable to the inherited exposure to any rehabilitation liabilities, which are also being laid to rest satisfactorily."
The company is developing Tulu Kapi as a 115,000-ounce-a-year gold mine, which should enter production late this year or early next.