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LONDON (Alliance News) - Strategic Minerals PLC Thursday said it has accepted a settlement worth USD675,000 in its dispute over access to the rail network that serves the Cobre mine in the US.
The settlement will be paid to Strategic Minerals in instalments with the first payment expected to be made in August of USD100,000, followed by a USD400,000 payment in January and a final USD175,000 payment in June next year.
Strategic Minerals had signed a contract with the operator of the railroad, South Western
Rail Road, to upgrade aspects of the rail to ensure it could handle shipping certain volumes of magnetite and the rail operator had provided guarantees to the company regarding capacity and traffic.
Strategic Minerals, however, soon raised concerns about the history of derailments and because of "go slow on the line", which it believed had breached the warranties offered by the rail operator, prompting it to launch legal action.
On Thursday, Strategic Minerals said it had accepted the settlement and called it an "excellent" result that has provided the business with "non-dilutive funds" to complete its plan.
Strategic Minerals shares were up 4.9% to 0.373 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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