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September 23, 2019Cart


by Westchester County Business Journal

Global Gold digs for old $16.8M arbitration award

A struggling precious metals exploration company based in Rye has sued two international companies to enforce an old $16.8 million arbitration award over rights to a Chilean gold mine.

Global Gold Corp. sued Alluvia Mining Ltd. of Jersey, Channel Islands, U.K., and Amarant Mining Ltd. of Dubai, U.A.E., in the White Plains federal court.

The defendants failed to comply with an award and settlement agreement, an arbitrator ruled in 2014, and “have not offered credible reason for their repeated failures.”

Global is in the business of exploring and developing gold and silver mines in Armenia, Canada and Chile.

It incurred net losses of nearly $1.2 million in the first six months of last year, according to a U.S. Securities and Exchange Commission (SEC) filing, and its liabilities exceeded assets by $20.2 million. It gave notice a year ago of terminating its SEC registration, under rules governing minimum requirements for securities.

Global made a deal with Amarant in 2011 to transfer ownership of companies that held gold mine rights in Chile. Amarant then transferred its rights and obligations to Alluvia.

Global negotiated a new payment schedule with them in 2013, but they failed to abide by the deal, the complaint states.

Then Global filed an action with the International Centre for Dispute Resolution. Stephen S. Strick, the arbitrator, ruled that Alluvia and Amarant had to pay Global $2.5 million. The companies negotiated a new settlement, the complaint says, and Amarant and Alluvia again failed to abide by the terms.

Global went back to the arbitrator. Strick ruled in 2014 that Amarant and Alluvia were in breach of their agreement and the arbitration award.

He ordered them to immediately pay $16.8 million plus 12 percent interest, barred them from disposing of assets until payment was made, and ordered them to turn over financial records “relating to the issue of whether respondents have diverted funds which could have been used to pay Global Gold.”

The lawsuit does not explain why Global has been unable to collect its payments for four years.

Last year, according to the Jersey register of companies, Alluvia Mining Ltd. was dissolved.

Johan Ulander, chairman of Amarant, was arrested in Sweden on fraud charges last year, according to Global’s last SEC filing, and the Swedish government indicted another man in connection with a $1 million guarantee for Amarant’s and Alluvia’s obligations to Global.

Global is publicly traded on the over-the-counter bulletin board market, where recently it has traded at $2.50 to $2.75 per share.

Two-thirds of the common stock were owned by six insiders a year ago, including director Ian C. Hague with 48.8 percent and CEO Van Z. Krikorian with 7.6 percent.

Hague, an expert in Russian investments, is co-founder of Firebird Management LLC, where he managed funds worth about $1 billion as of a year ago. Krikorian is a lawyer and an adjunct professor of law at Pace University Law School.