(DMNKF:OTC)
TORONTO, March 26, 2021 /CNW/ - DNI Metals Inc. (OTC:
DMNKF) ("DNI" or the "Company")
Coronavirus- Madagascar
In order to prevent the risk of the spread of the novel
coronavirus (COVID-19), the Government of Madagascar has not allowed international
flights in or out of the capital city of Antananarivo since, 21
March 2020, it is unknown when this will change.
In an Article in the Africa Report, written
by Olivier Caslin, dated
February 19, 2021, where he
interviewed the IMF representative in Madagascar since 2018, Mr. Marc Gérard.
Mr. Caslin asked: "What is Madagascar's economic situation since the
pandemic erupted in March?"
Mr. Gérard answered; "The country has been hit hard. The
latest estimates predict a recession of at least 4%, even though
growth of 5% was expected in early 2020. This deceleration is
essentially due to external shocks, namely the halt in tourism and
the sharp drop in trade, as well as the disruption of supply chains
linked to the implementation of confinement measures. The economic
crisis is severely affecting Malagasy people in a country where
social safety nets are very thin".
Mining Permits in Madagascar
According to Mining Review Africa, in an article dated
November 4, 2020; "Since assuming
office in January 2019, President
Andry Rajoelina has made reform of
the mining sector one of his top priorities, yet his approach has
drawn criticism from industry players.
Approval of a new mining code by the government council on
20 November 2019, after no prior
consultation with stakeholders, sent shock waves through the
industry.
Although the provisions were rejected at a subsequent cabinet
meeting on 27 November 2019, the
government's approach served to fuel distrust between Rajoelina's
administration and mining operators.
At the time, there were mounting frustrations within the
government that big asset operators such as Rio Tinto, which had
accumulated significant debts at QIT Madagascar Minerals, were
under-performing.
Pressure from the World Bank and the Chamber of Mines eventually
led the Ministry of Mines to initiate a proper consultation process
involving all stakeholders.
The COVID-19 pandemic has now stalled this review process."
The government of Madagascar
continues to have the issuing of all licenses, permits and title
cards on hold as they are still considering changes to some of the
mining laws.
Termination of the DNI Madagascar Team
In December 2017, DNI's previous
Country Manager, Mr. Steven Goertz,
had promised that the environmental permits would be issued and DNI
would be ready for production within approximately 30 days.
Throughout 2018, again and again, Mr. Goertz assured
management and the board that the permits would be issued within
days. Mr. Goertz even provided DNI with documents and
receipts, that according to him, showed that all documents and fees
had been filed and paid at the Office National pour
l'Environnement ("ONE").
While investigating the permitting process completed by the
previous country manager and his team, the Chairman Daniel Weir, found that the "ONE" argued that
the documents presented to the DNI Senior Management and Board in
Canada from Mr. Goertz were in
fact, forgeries. Mr. Goertz and his team had withdrawn the
funds from the DNI bank account in Madagascar and yet the "ONE" argued they had
never received those funds.
On October 15, 2018, the DNI
Madagascar team lead by the former country manager was terminated,
and Daniel Weir, DNI's Chairman of
the Board, took charge of all operations in Madagascar. The now terminated team refused to
return to DNI any and all corporate documentation in their
possession.
October 16, 2018 through to
Mid-2019, Mr. Weir was able to properly file the documentation,
complete the required onsite technical meetings, complete the
required public consultations, and pay the proper fees, all of
which Mr. Goertz had claimed to have completed but did not,
misleading management, the board and the shareholders of
DNI.
The delays created by Mr. Goertz, pushed the permitting process
into the new government administration, who as mentioned above have
put all permits on hold. These delays have caused DNI and its
shareholders substantial financial loses. DNI will be looking
at all the options available to them in the courts in any attempts
to recoup these losses from the applicable parties responsible.
Fraud Trial - Criminal Court
Under Malagasy law, if a person becomes aware of a crime it must
be reported to the police. Therefore, Daniel Weir reported the fraud to the
police. The fraud being, that the former DNI Madagascar team
had apparently forged government documents and stolen funds.
On February 19, 2020, a trial was
held. On March 5, 2020 a
judgement and the sentencing was released. The court found
Mr. Goertz guilty of fraud and of forgery of official government
documents. He was sentenced to two years in prison and Mr. Goertz
will be banned from staying in Madagascar for a period of three years after
he has served his sentence. The same court also ordered Mr.
Goertz to pay DNI, 60,000,000 Ariary (sixty million Ariary) in
damages.
On October 6, 2020, an opposition
trial was held for Mr. Goertz. Since Mr. Goertz nor his
Lawyers attended the original trial in February of 2020, he was
entitled to oppose the length of the sentencing but not the fraud
and forgery charges. The court upheld the original sentencing
of two years in prison and Mr. Goertz will be banned from staying
in Madagascar for a period of
three years after he has served his sentence. The same court
also ordered Mr. Goertz to pay DNI, 60,000,000 Ariary (sixty
million Ariary) in damages, plus court costs of 5,000,000 Ariary
(five million Ariary)
On February 12, 2021, an appeal
trial was held. The court upheld the original sentencing of two
years in prison and Mr. Goertz will be banned from staying in
Madagascar for a period of three
years after he has served his sentence. The same court also
ordered Mr. Goertz to pay DNI, 60,000,000 Ariary (sixty million
Ariary) in damages. The same judge found that Mr. Weir had
filed an invalid report with the police and upheld the charges
against Mr. Weir. Mr. Weir immediately appealed the charges
to a higher court.
Under Malagasy law it is illegal not to file the corporate taxes
in a timely manner. As the previous DNI Madagascar team
refused to return the corporate documents to DNI, Mr. Weir had to
file a report with the police on behalf of DNI saying that the
pertinent corporate documents required to file the taxes had been
lost and/or stolen. As the previous team still held those
documents in their possession, they were able to go to the courts
and declare that the report Mr. Weir filed with the police claiming
the documents were lost or stolen was technically invalid.
This led to the charges being draw against Mr. Weir in
Madagascar. Mr. Weir's charges are under Section 161 of the
Madagascar Penal Code which in basic terms, reads that a document
was incorrectly filed and used in Madagascar. As already
stated, these charges are already being appealed.
Commercial Court
In Madagascar, all Malagasy
companies, DNI's local subsidiaries, must have a Manager ("Gerant")
that is either a citizen of Madagascar or have residence status. Mr.
Goertz being a resident of Madagascar, was made the Gerant of the DNI's
subsidiaries, DNI Metals Madagascar Sarl., which holds the permits
for the Vohitsara project, and DNIM Holdings No.1 Sarl., which
holds the permits for the Marofody Project.
On October 15, 2018, Mr. Goertz
was terminated as the Country Manager, and Gerant of the local
subsidiaries, and ordered to return all documents and assets of DNI
and its subsidiaries. Mr. Goertz refused stating he was
owed money, even though he has since been found guilty of forgery
and misappropriating the company funds.
Mr. Goertz has been removed as Gerant of DNIM Holding No.1 Sarl
and DNI is working on removing him as Gerant of DNI Metals
Madagascar Sarl. Once the appeal process is completed, since
Mr. Goertz has been criminally convicted, he cannot serve as a
Gerant of a company in Madagascar.
DNI has filed a lawsuit against Mr. Goertz for U$2.5 Million in
Madagascar representing some of
the losses that he has caused DNI and its shareholders.
Mr. Goertz has also filed a claim in the courts saying he is
owed consulting fees. Mr. Goertz was rightfully terminated in
October 2018. At this time there are no outstanding fees owed
to Mr. Goertz or any of his consulting companies on the books of
DNI.
ASX Press Release – Cougar Appoints Administrators
Pitcher Partners, in an ASX announcement, dated June 30, 2020, released the following
information.
https://www.asx.com.au/asxpdf/20200701/pdf/44k49v49wrkx39.pdf
"Cougar Metals NL, Appointment of Administrators
At approximately 2:00 pm on
30 June 2020, the Board of Directors
appointed Bryan Hughes and
Daniel Bredenkamp of Pitcher
Partners as Joint and Several Administrators of the Company
pursuant to section 436A of the Corporations Act 2001.
Suspension of shares from trading whilst the Company is in
Administration
Whilst the Company is in Administration, all listed securities
will remain suspended. Shareholders are also unable to transfer
their shares during this time
Current Status of the Company
The Administrators have assumed control of the Company's assets
and will work with the Board during the administration period to
maximize the outcome for all stakeholders of the Company.
Updates on the progress of the Administration
The administrators will provide updates throughout the
administration by way of announcements to the ASX and we ask that
shareholders refrain from contacting the Administrators' office at
this time."
Administration in Australia is
equivalent to Chapter 11 in the USA and CCAA in Canada.
DNI issues Cougar additional Default Notices
On September 24, 2018 a Settlement
Agreement (the "Agreement") was reached between DNI and
Cougar Metals NL ("Cougar") with respect to DNI's Vohitsara
Property in Madagascar.
On July 23, 2019, DNI issued
Cougar a default notice claiming that Cougar had breached the
non-disparagement provision in the Agreement.
Cougar requested an arbitration to dispute the default. A
hearing was held on November 18, 2019
in Toronto.
On December 2, 2019 a decision was
handed down by the arbitrator in which it was decided that;
- Cougar had breached the non-disparagement provisions of the
Agreement;
- The DNI's notice of breach was justified and Cougar's claim was
dismissed;
- DNI was unable to prove that it had incurred financial
damages as a result of Cougar's breach;
- DNI's request for a set off against, or cancellation of, the
payment to be made by DNI to Cougar under the Agreement was
dismissed; and
- The payment that was due to Cougar on July 25, 2019 was due two days after the date of
the decision.
However, on November 5, 2019 DNI
issued Cougar a second default notice for continued failure to
observe the non-disparagement and confidentiality
obligations of the Agreement. As applicable with the
first default notice, the Agreement provides that DNI is entitled
to suspend payment of the balance of the amount owing under the
Agreement pending determination of any dispute regarding Cougar's
breach by an arbitrator.
On December 10, 2019, DNI issued
Cougar a third default notice for failure to observe the
non-disparagement and confidentiality obligations in the
Agreement. Again, the Agreement provides that DNI is entitled
to suspend payment of the balance of the amount owing under the
Agreement pending determination of any dispute regarding Cougar's
breach by an arbitrator.
On May 4, 2020, DNI issued Cougar
a fourth default notice for failure to observe the
non-disparagement and confidentiality obligations in the
Agreement. Again, the Agreement provides that DNI is entitled
to suspend payment of the balance of the amount owing under the
Agreement pending determination of any dispute regarding Cougar's
breach by an arbitrator.
On March 16, 2021, DNI issued
Cougar a fifth and sixth default notice for failure to observe the
non-disparagement and confidentiality obligations in the
Agreement. Again, the Agreement provides that DNI is entitled
to suspend payment of the balance of the amount owing under the
Agreement pending determination of any dispute regarding Cougar's
breach by an arbitrator.
Mr. John Carter has started a new
venture that needs his fulltime attention. He has decided to
resign as a director of DNI. Mr. Carter will continue as an
advisor to the company. We thank Mr. Carter for all his
guidance and support.
DMNKF - OTC
Issued Common Shares: 132,687,603
SOURCE DNI Metals Inc.