Anooraq dragged into court by famous stock promoter
2004-12-10 14:32 ET - Street Wire
by Stockwatch Business Reporter
Stock promoter Robert Friedland's 54.58-per-cent-owned Ivanhoe Nickel & Platinum Ltd. is petitioning the B.C. Supreme Court to have the British Columbia International Commercial Arbitration Centre and Anooraq Resources Corp. solve a South African property dispute. Ivanhoe Nickel wants the court to appoint lawyer Gerald W. Ghikas to mediate its dispute with Anooraq through the BCICAC. Ivanhoe Nickel and Anooraq are in the midst of a spat to determine if Ivanhoe Nickel has earned its 50-per-cent interest in a South African mineral property.
The agreement
Ivanhoe Nickel, previously known as African Minerals Ltd., entered into an earn-in agreement with Anooraq on June 29, 2001. The agreement would have Ivanhoe Nickel earn a 50-per-cent interest in Anooraq's Rietfontein 2 KS farm in South Africa. Ivanhoe needed to subscribe for 800,000 Anooraq units at 65 cents per unit, with the warrants attached to the units being exercisable at 70 cents for one year. Ivanhoe also needed to spend $750,000 on the property in the first year, and another $750,000 in the second year of the agreement. Ivanhoe could hurry its acquisition along by spending the $1.5-million before the required two years were up. The private company was the operator on the project.
A section of the 2001 agreement, signed by Ronald W. Thiessen for Anooraq and Peter Meredith for Ivanhoe Nickel, stated that under the agreement, if a dispute arose, both parties could apply to a B.C. arbitrator for a decision.
The problem
Time passed, and Ivanhoe Nickel made progress in earning its half interest in the property. However, a dispute arose whether Ivanhoe earned its interest, and Ivanhoe referred the matter to binding arbitration on Sept. 4, 2003. Ivanhoe and Anooraq were unable to agree who should be the arbitrator in the matter, and Ivanhoe went to the BCICAC on Oct. 2, 2003, asking it to appoint an arbitrator. More than six months later, the BCICAC offered four names as potential arbitrators: Kent Gary Woodruff, William J. Worrall, Wilfred J. Wallace and Gerald Ghikas. The BCICAC asked Ivanhoe Nickel and Anooraq if they objected to any of the proposed arbitrators, and to rank their preferences.
On June 16, 2004, Anooraq informed the BCICAC that it objected to Mr. Wallace, Mr. Worrall and Mr. Woodruff, leaving Mr. Ghikas as the only acceptable name. The next day, Ivanhoe Nickel provided its objection to Mr. Woodruff and Mr. Wallace. Of the remaining proposed arbitrators, Ivanhoe Nickel liked Mr. Ghikas the best, and Mr. Worrall second.
Mr. Ghikas, the first choice of Ivanhoe and the only name not ruled out by Anooraq, was called the B.C. bar in 1974, and was appointed Queen's Counsel in January, 2001. His curriculum vitae, attached to the petition, lists his decades of experience. Highlights include acting as arbitration counsel for Powerex Corp. to recover a $100-million (U.S.) award in a dispute over a long-term electricity agreement; counsel for bank directors in the collapse of the Northland and Canadian Commercial banks; and defending class action proceedings stemming from Bre-X Minerals Ltd. Mr. Ghikas is also a fellow of the Chartered Institute of Arbitrators.
On the same day as Ivanhoe Nickel proposed accepting Mr. Ghikas, June 17, 2004, Anooraq told the BCICAC that it did not agree to Mr. Ghikas as arbitrator. In its letter, Anooraq wrote that it was "content to consider Mr. Ghikas in the context of a full list of qualified arbitrators."
To date, the BCICAC has neglected or refused to appoint anyone to arbitrate the matter, and Ivanhoe Nickel has now taken the matter to court.
The letters
A supporting affidavit filed with the petition contained the many letters exchanged between the companies' lawyers. In the exchange, Louis Zivot, Anooraq's lawyer, told Ivanhoe Nickel's counsel Elliott Meyers that the arbitration centre had not been responding to its requests for a further list of nominees. His clients had suggested that Ivanhoe Nickel consider R. Stuart "Tookie" Angus as a potential arbitrator, as he has both the legal experience Ivanhoe Nickel wanted, and experience in mining. Anooraq suggested Mr. Angus in a Dec. 6, 2004, letter, and the Ivanhoe Nickel petition was filed two days later in the Supreme Court of British Columbia.
Neither the BCICAC or Anooraq have filed a reply to the petition since it was filed on Dec. 8.
Ivanhoe Nickel
Ivanhoe Nickel is a private Yukon company, in which Mr. Friedland, Canada's best-known stock promoter -- he prefers mine financier -- controls a majority of the shares. According to Ivanhoe Mines Ltd., Mr. Friedland's current promo, as of Dec. 12, 2003, he owned 54.58 per cent of Nickel. Nickel shares some administrative costs with Mr. Friedland's other Ivanhoes: Ivanhoe Capital Corp., Ivanhoe Energy Inc. and Ivanhoe Mines Ltd. An October, 2004, Raymond James research report, gushing praise of Anooraq and its status as a Black Economic Empowerment company after the reverse takeover of Pelawan Investments Pty. Ltd., notes that the Rietfontein block covers an up-dip extension of a large deposit owned by Ivanhoe Nickel. The report also projects that Nickel will go public in the near future. |
