‘Deal brokers’ in N$5m commission dispute

A LEGAL tussle has ensued between two mining deal brokers who acted as agents in the impending sale of the Kombat Mine from Grove Mining Namibia over an alleged N$5 million commission payment.

A Canadian company, Pan Terra Industries, is taking up majority shareholding in the dormant Kombat Mine. At the centre of the wrangle is the N$5 million in brokerage commission which a local mining company, African Renaissance Mining Company (Aremco), is claiming to be entitled to after acting as Grove Mining Namibia’s agent. Aremco’s executive chairman Mihe Gaomab (The First) is accusing another deals broker, businessman Knowledge Katti, of trying to ‘swindle’ him out of the N$5 million commission. Gaomab said Katti has acted as ‘middleman’ on behalf of Pan Terra Industries and has been ‘dodging’ him since last year. Gaomab told The Namibian yesterday that he is preparing an urgent High Court application today to interdict the entire deal, subject to the payment of his commission.The N$5 million commission is part about N$60 million that the Canadians are prepared to fork out for the Kombat copper mine which was bought from Weatherly International Plc by Grove Metals South Africa.The Kombat Mine, situated about 60 kilometres east of Otavi, has been under care and maintenance since 2008.Correspondence seen by The Namibian from Gaomab to Grove Mining Namibia shows that as part of the deal, a down payment of N$2,5 million was supposed to have been paid first before the actual payment for the purchase of the mine was to be made.When the final payment of the N$57,5 million by ‘the buyer’ is paid, then an additional N$2,5 million is supposed to be paid again before the mine is transferred to the new owners.’Non-payment of these two parts commission shall result in legal suits and the government of Namibia, especially the Ministry of Mines and Energy will be instructed to block this transaction,’ Goamab wrote to Grove Mining Namibia last year.Acting on behalf of Grove Mining Namibia, Gaomab had also written to Katti in July last year in which he presented an ‘offer to sell’ indicating to him that N$5 million will be payment for the commission.The offer to sell further said failure of the company to pay the commission it will be blacklisted on the website of the International Chamber of Commerce and Industry for worldwide alert. Gaomab had further said that he also reserves the right to institute claims for damages both in Namibia and South Africa.’I will seek a court interdict to stop the transfer of the mine to the Canadians until the commission is paid,’ Goamab said.Gaomab said the Canadians were in the country last week to carry out due diligence at Kombat, but he has been kept in the dark.In his response, Katti admitted that Gaomab has indeed introduced him to ‘business opportunities’ to look for investors adding that they have had discussion late last year. He said there was nothing in writing suggesting a commission of N$5 million. Katti said he only knew Gaomab but not Aremco, as a company contrary to ‘an offer to sell’ from Gaomab on Aremco’s letterhead.’The Mihes issue is a non-issue and there is no bad blood between me and him. We are about to strike the deal [on Kombat Mine] which is something positive. As a principled businessman I don’t forget those who introduced me to business opportunities. Last time I spoke to him was late last year and of course I will take care of him,’ Katti said.Confronted about the fact that Gaomab now intends to take the matter to court, Katti said that will be a different issue altogether.’Going to courts means that you must have facts. We are not into business of going to courts but if the matter goes to the courts it will be a different matter altogether because that is when you want to tarnish somebody’s reputation,’ Katti said.The mining assets at Kombat, held under the exclusive mining licence, include all mining infrastructure and plant as well as a new Asis Far West shaft worth N$200 000 and all mineral rights. The licence expires in 2019.The Vancouver-based Pan Terra Industries is attracted to the potential to extract known copper, lead and silver resources from within the existing mine workings and to discover new deposits of copper, lead and silver within the land package.The company is also looking at possibility of delineate significant manganese resources not previously evaluated by historical owners. Canadian newswire reported last month that a commission of US$910 940 (about N$6,3 million) was also to be paid to Dundee Securities for acting as agent for the Kombat and Pan Terra deal.Dundee was also to receive 1820 980 ‘broker warrants’ entitling the company to acquire 1 820 980 common shares of Kombat Mine