Bathurst Resources Responds to ASX Compliance Query on Performance Payments

Background and Legal Context

Bathurst Resources Ltd has been involved in long-running legal proceedings with LMCHB Limited, formerly L&M Coal Holdings Limited. The core of the dispute revolves around performance payments and the issuance of performance shares as part of the agreement for the purchase of Buller Coal Limited.

According to the Supreme Court judgment in 2021 and a subsequent arbitration decision in 2023, Bathurst's obligations to make these payments are contingent on specific conditions outlined in the Agreement for Sale and Purchase (SPA). The key clause, 3.10 of the SPA, provides a suspensory effect, delaying these obligations until certain conditions are met.

ASX Compliance Query Response

In response to the ASX's compliance query, Bathurst clarified that as long as royalties under the Deed of Royalty are paid, even if they amount to zero, the performance payments and shares are not due. This interpretation was upheld by both the Supreme Court and the arbitrator.

Bathurst also addressed questions about its mining permits, stating that changes to permits, such as surrenders or replacements, are part of normal business operations and do not affect their obligations under the SPA. The company emphasized that the cessation of all mining operations in the permit areas is a remote possibility.

Implications of Legal Decisions

The arbitrator's decision, which included a declaration of a change in control, was deemed not to have a material effect on the value of Bathurst's securities. The company argued that the decision did not alter the status quo or its financial position significantly.

Bathurst's directors believe that the outcome of any ongoing appeals, such as the Guarantee Proceedings, will depend on the specific judgments and potential remedies granted by the court.