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by Mike Caswell

Eastern Platinum Ltd. is facing a lawsuit in the Supreme Court of British Columbia from the proposed buyer of its Crocodile River mine, Hebei Zhongheng Tianda Platinum Co. Ltd. According to the suit, Eastern Platinum looks to be backing out of the $50-million deal. (All figures are in U.S. dollars.) Hebei Zhongheng is seeking a court order that would force Eastern Platinum to proceed with the sale.

The lawsuit comes just months after shareholders ousted Eastern Platinum's board at the company's July 5, 2016, annual general meeting. Among the issues that shareholders brought up was the deal to sell Crocodile River. At least one shareholder questioned whether the purchase price was fair. There were also questions about where the money would go, and whether shareholders would see any of it. A dissident group headed by Ka An Development Co. Ltd. of Hong Kong took over the company's board at the meeting.

According to the lawsuit, this is when the trouble began. In its notice of claim, filed on Dec. 6, 2016, Hebei Zhongheng claims that new management started to waiver on the deal for Crocodile River. The deal, as described in the lawsuit, was formalized in a written agreement dated June 28, 2016 (exactly one week before the management change). The agreement specified that Eastern Platinum would sell Crocodile River, which is in South Africa, for $50-million.

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