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Commitments
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments

14.    Commitments

 

Current Litigation

 

From time to time, we may be involved in various claims, lawsuits, and disputes with third parties, actions involving allegations of discrimination or breach of contract actions incidental to the operation of our business. However, we are not currently involved in any litigation which we believe could have a materially adverse effect on our financial condition or results of operations.

 

Prior to deconsolidation as fully described in Note 3, MAB-C and MAB-Z identified the following legal matters:

 

Mabwe Minerals Zimbabwe v. Base Minerals & 2 others (case HC6842/14) – Mabwe Minerals Zimbabwe (Private) Limited ("MAB-Z") is seeking damages in this case in the amount of $3,183,918 arising from the illegal occupation of the mine by the defendants.  This matter is waiting to be scheduled for argument.  Even though the occupation of the mine has been previously deemed illegal (HC1549/14) and therefore MAB-Z is thought to have reasonable basis for this suit, it is unclear that even if MAB-Z should prevail whether damages will be awarded and, if awarded, whether damages could be recovered.

 

Mabwe Minerals Zimbabwe v. Base Minerals Zimbabwe & ORS – MAB-Z has filed an application for joinder under HC10201, an application filed by Base Minerals Zimbabwe which is seeking an order to access the mine.  MAB-Z has not been named as a defendant in this action which has required this application for joinder.  This application is waiting to be scheduled for argument.  MAB-Z believes that it should be successful since it has already obtained a court order finding it is the actual owner of the mine.

 

Mabwe Minerals Zimbabwe v. Base Minerals & The Mining Commissioner (case HC1414/14) – On February 13, 2014 a tribute agreement was filed by Base Mineral Zimbabwe against Chiroswa Syndicate.  The tribute agreement expired in 2011 and Chiroswa had since sold the underlying Mine Blocks 1-6 at Dodge Mines to MAB-Z.  MAB-Z believes that it is the rightful owner of these mine blocks on the basis that they were purchased under a lawful sale and for which MAB-Z holds the actual certificates of ownership.  MAB-Z believes that this is a nuisance claim and is seeking to nullify the filing of this agreement.  MAB-Z further believes that no impairment is necessary as of December 31, 2014.

  

Peter Valentine v. Mabwe Minerals Zimbabwe (case HC 4112/13) - Mr. Valentine has filed a claim relative to rights under a tribute agreement (case HC1414/14) seeking damages and a share of rights under an irregular sale of the Dodge mining rights. The tribute agreement expired in 2011 and MAB-Z believes that it is the lawful, free and clear owner of Dodge Mine Blocks 1-6.  This case was heard before the High Court of Zimbabwe and was dismissed with costs as of October 16, 2014.  As MAB-Z believed this suit to be a nuisance claim from the beginning MAB-Z still maintains that the facts of the case were rightly determined.  This case is under appeal with the Supreme Court under case SC/517-14 heard on November 24, 2014.  MAB-Z is currently awaiting determination of the appeal.  MAB-Z believes this appeal to be baseless and that no impairment is necessary as of December 31, 2014.

 

Land Lease Agreement

 

Prior to deconsolidation as discussed in Note 3, on May 13, 2013, MAB-Z entered into a 20 year agreement with Ettie Magadzire, owner of Palm Grove Farm whereby rights of unrestricted access to claims of MAB-Z were granted (“Land Lease Agreement”). Magadzire possessing surface rights to the property on which the claims were located under this agreement conveyed the right of use for MAB-Z to explore, test, sample, verify, assess the full nature and extent of the deposit, and to develop the mineral resources of aforesaid claims. In consideration for those rights MAB-Z agreed to pay to Magadzire $70,000 payable quarterly in arrears after the first annual installment is paid in the following manner: (a) $17,500 payable in $5,000 cash (paid), $5,000 for a vehicle (paid by officer of MAB-Z and included in related party payable) and $7,500 in fuel (paid); (b) $17,500 payable six months after commencement of mining operations at the Claims; (c) $17,500 payable nine months after commencement of mining operations; and (d) $17,500 payable one-year after commencement of mining operations. Then payments by MAB-Z will be made in quarterly installments of $17,500 (or $70,000 per year). The agreement has a total value of $1,400,000.

 

Letter of Credit

 

Prior to deconsolidation as discussed in Note 3, on February 8, 2013, MAB-Z was issued as beneficiary an irrevocable documentary letter of credit from Baker Hughes Oilfield Operations, Inc. in the documentary credit amount of $3,000,000 per lot of crude barite (or a total of $9,000,000) to pay for shipments from Beira, Mozambique to any U.S. Gulf port of three lots of barite meeting the specifications set forth in the letter of credit. The first shipment was to be made between June 1, 2013 and August 31, 2013, the second shipment was to be made between September 1, 2013 and November 30, 2013 and the third shipment must be made between December 1, 2013 and March 1, 2014. MAB-Z was discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite. No update on these discussions are available as of the date of this filing.