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OVERVIEW:
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June 24, 2010:
Litigation in the DRC Dismissed; El Nino Files $850,000 Counter Action
Against Georges Kavvadias and GCP Group Ltd. in Canada for Breach of
Agreement
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August / September 2010
- El Niño files two judgments in the DRC against George Kavvadias and GCP
Group
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October 1, 2010:
El Nino charges Georges Kavvadias and GCP Group with Fraud, Fraudulent
Misrepresentation, Misappropriation of Funds, Breach of Agreement and Claims
for USD$ 850,000 + damages in the Supreme Court of British Columbia by El
Nino.
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January 5, 2011
- El Nino
reports that it received notice from the Supreme Court of British Columbia
of the hearing held on November 25, 2010 regarding its Notice of Dispute and
Petition against George Kavvadias and GCP Group. Management believes
the company was successful by bringing the petition to the
Supreme Court as the court determined that these claims were to be decided
through arbitration.
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April 11, 2011:
Announcement that DRC court rules in favour of El Nino for two judgments
against George Kavvadias.
April 11, 2011, Vancouver,
Canada; --
Further to previous news releases, El Nino reports that the Tribunal de Commerce
Instance in the Democratic Republic of the Congo (DRC) has now
rendered two decisions against GEORGES KAVVADIAS, ruling in favour of El
Nino.
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The first decision declares
null and void the minutes of the meeting by virtue of which GEORGES
KAVVADIAS appointed himself as manager of the Joint Venture Company,
Infinity Resources SPRL (Infinity), (El Nino 70% and GCP 30% of which 20% is
beneficially owned by Foneco SPRL ,
the original permit holder for (PR) 5214(Kasala), 5125, 5216, and 5217 which
are in close proximity to Kasala.
The Kasala project is one of the first new Greenfields copper
discoveries in the last 10 years in this area of the central African Copper
belt.
El Nino is
the operator of the Joint Venture Company.
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In the second
decision, the Court removed Mr. Kavvadias as manager of Infinity Resources
and appointed an interim manager in order to call a shareholders' meeting
within two weeks
of the parties being notified of the judgments in order to appoint the new
managers of Infinity.. In both cases, Georges
Kavvadias was ordered to pay damages to El Nino and all costs.
From the French
translation of the first judgment,
The Tribunal de
Commerce went further in ruling that, "Whereas it was thus by design and
with fraudulent intent that Georges Kavvadias had these Minutes drawn up for
the purposes of claiming the capacity that he did not have by appointing himself
Manager of INFINITY RESOURCES S.P.R.L.; Whereas Georges Kavvadias
availed himself of this fraudulently acquired capacity in all instances to the
detriment of El Nino Ventures Inc. by seeking to evict it while committing
acts that are largely prejudicial to INFINITY RESOURCES S.P.R.L. with the risk
of causing it to lose almost all of its property; that
the minutes of the meeting of the Board of Directors appointing Georges
Kavvadias as Manager are NULL and VOID".
The following is an English
translation of a partial excerpt from the official transcript of the Court
proceedings;
THE COMMERCIAL COURT OF
LUBUMBASHI IN SESSION IN LUBUMBASHI AND SITTING IN A COMMERCIAL MATTER IN FIRST
INSTANCE RENDERED THE FOLLOWING JUDGMENT:
PUBLIC HEARING OF 07/03/2010
In rendering its decision for
the first Judgment, the Court ruling publicly and jointly regarding all the
parties, the Government Ministry having been heard in its conforming written
opinion read by Mr. MUTOKE, Assistant Public Prosecutor of the Republic;
In view of the Code
of Judicial Organization and Jurisdiction;
In view of the Code
of Civil Procedure;
In view of the Law
regarding the Creation, Organization and Operation of the Commercial Courts;
In view of Articles 258, 526 and
529 of the Congolese Code of Obligations;
In view of Article
81 para. 1 of the coordinated texts on Business Corporations;
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Declares admissible and well
founded the action brought by EL NINO VENTURES Inc.;
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Rules in its favour;
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Declares that the Special
General Meeting of July 4, 2007 was held irregularly;
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Decrees the nullity of the
minutes established at the outcome of said Meeting;
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Condemns the Defendant
Georges KAVVADIAS to pay damages and costs to El Nino
When called on to give its
opinion, the Government Ministry concluded that the Defendant GEORGES
KAVVADIAS exceeded the power conferred on him; and in the Government
Ministry's opinion, he was not empowered to
represent EL NINO VENTURES Inc. at the Shareholders General Meeting.
In addition the Government Ministry considered that the holding of this Meeting
was not preceded by a regular notice to the Partners and that the Minutes of
said Meeting were never filed with the Office of the Commercial Court,
the Court declared
the action initiated by El Nino admissible and well founded, and ruled in El
Nino's favour and granted El Nino the full benefit of the writ to institute
proceedings.
The Court noted that GEORGES
KAVVADIAS relied on the proxy entrusted to him by Mr. J. Luc Roy (past
President) to represent EL NINO at the disputed Meeting, but that in
representing EL NINO at the General Meeting of INFINITY RESOURCES, Mr. KAVVADIAS
went beyond the powers conferred on him and that Mr. KAVVADIAS did not provide
proof of the notice to the Partners to attend the General Meeting held on July
4, 2007.
As previously reported (News
Releases; October 1, 2010 and January 4, 2011),
the Company had
expected to go to arbitration sometime during February, 2011.
Following these decisions, the
Company is working with its legal counsel to
finalize the
appointment of the arbitrator and
set a series of dates for the
steps to be taken in the conduct of the arbitration and to pursue its claims
against Georges Kavvadias and his company GCP Group here in Canada, through the
process of Arbitration.
About El Nino Ventures Canadian
Assets and Joint Venture Partners
In Canada, El Nino holds a 50%
interest in an extensive base metal project located within the Bathurst mining
camp in Bathurst, New Brunswick, where earlier drilling campaigns have been
carried out on several historical deposits of lead, zinc and copper
mineralization within the large claim block owned 50% ELN, 50% Xstrata Zinc.
El Niño subsequently entered
into an option agreement with Votorantim Metals Canada Inc. and Xstrata Zinc
Canada whereby Votorantim may earn a 50% interest in El Niño's landholdings by
expending $10 million over 5 years and may further increase its interest in El
Niño's landholdings to 70% by expending an additional $10 million over a further
two years. (Please see release dated
May 4, 2010,).
In February 2011,
ELN announced that a $5 million exploration program has begun consisting of
airborne and ground geophysics and will include a 10,000 metre drill program
which is slated for commencement in the spring of 2011.
(See press release dated
February 23, 2011).
In January 2011, ELN announced that it has provided notice Votorantim Metals
Canada Inc. (Votorantim) to enter into an Option Agreement on the Murray Brook
Polymetallic Deposit, situated in the Bathurst Mining Camp in New Brunswick,
Canada. (See press release dated
January 20, 2011).. Drilling has been initiated on this project
El Nino's
management is aggressively seeking to acquire additional projects on an
international scale that meet our corporate objectives. This includes base and
precious metal properties within Africa and North America.
El Nino has approximately $2.5
million in cash with no debt.
Comments from Mr. Barr, Chairman
and Acting CEO,
"I would like to thank our shareholders, the directors, the financial community,
our legal counsel, management and consultants in Canada and the DRC who have
supported El Nino Ventures over the last two years, especially because of the
situation we were forced to address in the DRC."
Without their continued support
and belief, El Nino Ventures would not have been able to accomplish its
objectives. I am exceptionally proud of the team that we have assembled since
I became the Chairman and acting CEO in September 2009. At the time, I was
and continue to be a major shareholder of this company. I was asked by the
previous board of directors and the President to head up El Nino (I felt
obligated to do so as I had worked with the majority of the board for over 20
years and many of the shareholders were my long time friends/investors) when
they were experiencing difficulties with Mr. Kavvadias, who was our partner in
the DRC.
When I rejoined El Nino, my
mandate was to refinance the company and in extremely difficult times our financial
team accomplished that objective. From there, working in conjunction with the
board of directors and our technical team, we continue to advance its projects
in the DRC and Canada.
In the Fall of 2009, we then
worked tirelessly with Mr. Kavvadias to get his commitment to work with El
Nino's management team and together we were to proceed with the further
development of our DRC projects. At the end of 2009, El Nino raised sufficient
working capital to stabilize our balance sheets, and complete the geochemical
program (which was positive) and to finance the drilling which was slated for
April 2011. Previously, the Kasala project had produced exceptional drill
results which we believe demonstrated that it was the beginning of a new copper
discovery.
When I committed to become the
Chairman and acting CEO, a court action was already underway. After several
rounds of talks and negotiations, Mr. Kavvadias gave me a verbal commitment and
shook my hand and we agreed that the past was the past and that we would put our
differences behind us and together we would work to develop our DRC projects.
Subsequently, due to a court
action initiated by Mr. Kavvadias in the DRC, I personally visited two African
countries to do my best efforts to convince him that his actions were unfounded and
unfair to our shareholders who had commited millions of dollars to the DRC which
lead to the Kasala Copper discovery and to once again get Mr. Kavvadias to
recommit to our cause and work with El Nino's management to proceed with the
further development of our projects. Our negotiations and efforts were
unsuccessful.
Unfortunately, I had to advise
the board that we would have no choice but to defend our rights and take counter
actions to protect our assets on behalf of the shareholders of El Nino due to
Mr. Kavvadias' continued unreasonable and unrealistic demands. I personally
never intended to get this involved in an unproductive, prolonged series of
court actions which have caused our shareholders and management undue hardship
but looking back I do not see how we had any choice.
Then as now, I
believe in the Democratic Republic of Congo and its vast mineral wealth, more
specifically, that with continued support from the government and its citizens,
foreign companies like El Nino, will continue to invest in their country.
El Nino's
objective is to utilize the people of the DRC and blend their
expertise with our technical and financial ability to develop of our existing
projects.
Going forward, our
mandate is to acquire new projects and ultimately to create additional jobs,
further educate the local communities that are projects are located in and be
environmentally responsible. I believe the
accomplishment of this corporate vision will also help grow the DRC's economy.
The companies I have been
associated with, including the
International Metals Group, have completed over 30 option/joint venture
agreements with major mining companies, approximately 15 with mid-tier companies
and over 200 with junior mining companies on an International scale. Combining
our joint ventures with the equity we collectively raised approximately $500
million to complete our objectives to date.
I am very proud to say that
during my tenure as Chairman and acting CEO with El Nino Ventures, our legal,
technical, financial and administrative team have both achieved and exceeded its
objectives. Despite management's continued efforts, we cannot guarantee that
the final result will be in our favour. However, we will persevere and based on
the achievements which we have purposely and painfully overstated in this
release, we believe we will accomplish our objectives.
Our technical team is currently
finalizing exploration plans to continue the development of our DRC projects and
those announcements will be forthcoming.
On behalf of the shareholders
and board of directors of El Nino Ventures, I would like thank you for your
ongoing support.
"Harry Barr"
Harry Barr, Chairman and Acting CEO
For further information:
Corporate: Jay Oness --
jay@elninoventures.com
Investor Relations: Toll
free 1.800.667.1870
2303 West 41st Avenue, Vancouve, B.C. V6M 2A3
Email: info@elninoventures.com
TSX Venture Exchange or its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Note: this release contains
forward-looking statements that involve risks and uncertainties. These
statements may differ materially from actual future events or results and are
based on current expectations or beliefs. For this purpose, statements of
historical fact may be deemed to be forward-looking statements. In addition,
forward-looking statements include statements in which the Company uses words
such as "continue", "efforts", "expect", "believe", "anticipate", "confident",
"intend", "strategy", "plan", "will", "estimate", "project", "goal", "target",
"prospects", "optimistic" or similar expressions. These statements by their
nature involve risks and uncertainties, and actual results may differ materially
depending on a variety of important factors, including, among others, the
Company's ability and continuation of efforts to timely and completely make
available adequate current public information, additional or different
regulatory and legal requirements and restrictions that may be imposed, and
other factors as may be discussed in the documents filed by the Company on SEDAR
(www.sedar.com),
including the most recent reports that identify important risk factors that
could cause actual results to differ from those contained in the forward-looking
statements. The Company does not undertake any obligation to review or confirm
analysts' expectations or estimates or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Investors should
not place undue reliance on forward-looking statements.
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