Allied Gold ups counterclaim against GR Engineering

Gold miner Allied Gold has increased its counterclaim against GR Engineering, after the contractor lodged a claim for damages last year.

In June, Allied's subsidiary Gold Ridge launched a counterclaim against GR for $25 million after GR initially lodged its claim against Gold Ridge in June last year, seeking "to recover outstanding costs and associated damages of around $4.5 million relating to a lump sum engineering, procurement and construction contract".

It related to the expansion and refurbishment of the Gold Ridge mine in the Solomon Islands.

GR initially let out that it would be pursuing legal action in its 2011 full year results, and half yearly report in 2012.

Soon after it released its 2011 results, Gold Ridge made a counterclaim against GR, seeking damages relating to alleged defects from its EPC contract.

In late May this year, the miner also served GR with additional amended defence and counterclaims, including one for gold losses due to the alleged defects and representations regarding its performance.

The miner originally sought approximately $25 million.

Now Allied has announced that it is increasing its claim to $47 million.

According to the miner the claims breaks down into approximately $4 million in rectification costs, $1.15 million for "false and misleading statements by GR's managing director", $24.9 million for 'gold loss', and an additional $17.1 million due to "throughput loss arising directly from defective work carried out by GR".

GR immediately reacted with Joe Ricciardo, GR's managing director, stating that the company will "vigorously defend all counterclaims by Gold Ridge".

"Our view remains that Gold Ridge's action is an ambit counterclaim and we will aggressively continue to protect our reputation and excellent industry track record," Ricciardo said.

Within its statement it said it will continue to pursue the initial $4.5 million "owing by Allied Gold's subsidiary, Gold Ridge Mining for work done at its Gold Ridge mine the Solomon Islands".

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.