Not in Westchester County?
September 19, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Rye-based Global Gold awarded $23.1 million in Chilean mine rights fight

Global Gold Corp., a precious metals exploration company based in Rye, has been awarded a $23.1 million default judgment in a long-simmering dispute over gold mine rights in Chile.

U.S. District Judge Cathy Seibel on Oct. 29 ordered Amarant Mining Ltd. of Dubai, U.A.E., and Alluvia Mining Ltd. of Channel Island, U.K., to pay the judgment.

Whether Global Gold can collect the judgment is another matter. Amarant transferred its mining rights to Alluvia several years ago, Alluvia has been dissolved, the companies have ignored previous arbitration awards and their principal officer has been arrested on fraud charges.

“It appears they have no interest in appearing or being further connected to the arbitral award,” Solomon A. Frager, Global’s attorney, said in a letter to Seibel. “It is no wonder why they would not appear here” in federal court in White Plains.

Global has explored and developed gold and silver mines in Armenia, Canada and Chile. In 2011, it transferred rights to a Chilean mine to Amarant, which then transferred the rights to Alluvia.

In 2013, Global negotiated a new payment schedule, according to court documents, but Amarant and Alluvia failed to abide by the terms.

Global took the dispute to arbitration and the International Centre for Dispute Resolution ordered the companies to pay Global $2.5 million.

Once again, according to court documents, the parties negotiated new terms and once again Amarant and Alluvia failed to honor the deal.

Global went back to the arbitrator in 2014 and won a $16.9 million judgment and an order barring the companies from disposing assets.

The dispute was complicated when last year Johan Ulander, Amarant’s chairman, was arrested in Sweden on fraud charges.

The Chilean mine dispute found its way to federal court last May when Global petitioned to enforce the 2014 arbitration award.

Neither Ulander nor anyone associated with the companies has responded to summonses to answer the complaint.

The $23.1 million default judgment includes nearly $16.9 million from the 2014 arbitration award and $6.2 million in interest.

Seibel also continued a ban on Amarant and Alluvia on disposing assets until the judgment is paid. She ordered them to provide documents “relating to the issue of whether respondents have diverted funds which could have been used to pay Global Gold.”

Global, meanwhile, has been struggling. As of June 30, according to its latest unaudited financial statement, it had assets of $2.5 million and liabilities of $20.9 million, for a $18.4 million deficit.

“There is no assurance that the company will obtain the financing that it requires or will achieve profitable operations,” according to a note to the financial statement.

There are substantial doubts, Global states, “about the company’s ability to continue as a going concern.”