Plans by Minbos Resources to find a strategic partner for development of its African phosphate projects took a hit yesterday, after Minbos admitted it was in dispute with its local joint venture partner in the Democratic Republic of Congo.
Minbos shares fell sharply, closing down 17 per cent or 1.2ï¿½ to 5.8ï¿½, after it said DRC partner Allamanda Trading appeared to have made a grab for a majority stake in its Kanzi potash project.
The company was forced to put development of Kanzi on hold in late 2011 after DRC regulators queried the ownership of tenements associated with the Kanzi project. The dispute took almost a year to resolve but in August last year Minbos announced it had cut a joint venture agreement with Allamanda. Minbos handed over 2.6 million shares, paid a $US162,500 ($155,000) fee and provided "initial funding" of $US600,000 to Allamanda in exchange for 65 per cent of an expanded Kanzi project.
But that agreement appears to have fallen apart, with Minbos saying yesterday it had been presented with a "side agreement" purportedly signed between Allamanda and its local subsidiary that watered Minbos' interest in the project down to 49 per cent. Minbos said yesterday the agreement had been signed "without the knowledge or consent" of its directors, and it was seeking legal advice.
After a $3 million capital raising fell well short of the mark late last year, raising only $1.7 million, Minbos had said it was in discussions to find a strategic partner to fund the estimated $122.7 million cost of developing its African projects. Minbos said yesterday that was still "in progress".