Celsius Resources (AIM:CLA), the ASX and AIM-listed copper and gold developer, said it is contesting foreclosure notices issued against its 40% interest in Makilala Mining Company (MMCI).
The shares crashed some 43% lower, finishing Monday's session at 0.004p.
The dispute stems from the Omnibus Loan and Security Agreement (OLSA) between MMCI and Equinaire Holdings, a subsidiary of India's Kiri Industries Limited.
Equinaire acquired the loan on 9 June after Maharlika Investment Corporation, the Philippine sovereign wealth fund, assigned its rights under the OLSA.
Kiri said the acquisition was "a precursor transaction that is expected to enable the Group to benefit from an off-take arrangement, ensuring preferential supply of copper ore/concentrate" for a copper facility under development by Indo Asia Copper Limited.
On the evening of 17 July, Equinaire issued three notices: a claimed Event of Default tied to a Notice of Relinquishment sent to Sodor, a Notice of Commencement of Foreclosure Proceedings against Celsius' MMCI stake, and a Notice of Disposition seeking a public auction of that interest.
Celsius said it rejects both the default claim and Equinaire's authority to foreclose or sell the stake.
The company said it intends to protect its interests "to the fullest extent of the law".
Celsius has flagged further updates in line with its continuous disclosure obligations.
News Intelligence what this means for the company
Equinaire Holdings, which acquired a Philippine sovereign fund's loan to Makilala Mining in June, has issued foreclosure notices against Celsius Resources' 40% stake in the project, claiming a default tied to a Notice of Relinquishment. Celsius contests both the default claim and Equinaire's authority to foreclose. The dispute threatens a material asset for a junior explorer dependent on project advancement; the company has signalled it will fight the claim through legal channels.
A foreclosure action against a 40% stake in a development project represents a significant operational and financial risk for a micro-cap junior explorer. The outcome hinges on the validity of Equinaire's default claim and Celsius's legal standing to contest it; resolution could determine whether the company retains or loses a core asset, materially altering its portfolio and funding position.
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SP Angel flags Kiri offtake link to Celsius loan transfer
SP Angel described the assignment of Maharlika's loan to Equinaire, a Kiri Industries subsidiary, as a precursor expected to enable preferential offtake of Makilala ore/concentrate.
The broker, in a note, highlighted that this could secure supply for Indo Asia Copper Limited's upcoming copper facility and frames Kiri as a potential Indian offtaker for the project.
