Friday, October 23, 2015

Chidliak Royalty Part IV

It has been a bit of time since the last Royalty post.

For those who have missed the previous post:

--> Chidliak Royalty Post I

--> Chidliak Royalty Post II

-- Chidliak Royalty Post III

Since that, there have been 2 further documents submitted to the courts.

The first one on July 9th from Peregrine to the courts.

BHP has indicated that have reversed the royalty, but Peregrine indicated it hasn't seen any reversal literature.

Peregrine mentions that any such reversal doesn't preclude that the first right of refusal had been triggered.

Talks about the Novation deed clearly indicating that regardless if Peregrine signs it or not, it will happen and the BHP royalty Ltd.

Peregrine specifically mentions that BHP has acknowledge in previous legal speak that it admitted to transferring the royalty to BHP Royalty Ltd. As in, the transaction did officially happen. The reversal is a separate point.

It took Peregrine 7 days to respond to the July 2nd BHP response.

Sept. 8th - an amendment to the July 2nd document from BHP was submitted by BHP.
Talks about facts being admitted by BHP and facts being denied and facts being outside the defendants' knowledge. I guess the key points are the denied ones.
Comparing the changes from the July 2nd and sept 8th documents.

Additional comment on the March 16th shareholder circular being issued and the rationale behind the S32 demerger.

Confirms that BHP royalty and south32 were affiliates...but not after May 25th, 2015

Removed a comment that originally said the Chidliak royalty was not material to the S32 demerger.
Interesting as that comment possibly implies a low value for the Chidliak royalty.

Talks about an April 27th novation deed was enclosed whereas before it talked about a draft novation deed was prepared.

Talks about BHP royalty and South32 not being affiliates from 25 May, 2015.

Removes a whole line from the document that talked about 'good faith that the first right of refusal would not be triggered under the inclusion of the Chidliak Royalty'
Sounds to me like that 'good faith' implies that there was some doubt and they want that removed from the record.

Removed a whole line talking about when Peregrine took it's first position, to avoid doubt, it agree to reverse the first transfer.
Again, this casts doubt and sounds like it admitted the transfer did occur. Removing that and can assume the reverse was independent of Peregrine's cause?

At the end of these last 2 documents, it talks about:

Within 35 days of the end of the pleading period,  each party must provide...list of documents....all documents...all the relevant legal items that each group has basically.

There hasn't been an update since Sept one would assume that the 'pleading period' is still on, but at some point, we should see this list of items submitted to the website relatively at the same time for both parties. I think this is unless a settlement is made out of courts.

It looks to me like BHP has tried to remove any reference that they made earlier that a transfer actually occurred and Peregrine is indicating that previous documents confirm that BHP said that a transfer did occur.

Peregrine's front is a transfer did occur and the courts have to decide if a transfer to BHP royalty that was destined for South 32 did trigger a first right of refusal.

The first part of that seems fairly concrete, the second part has to be a judgement decision and I don't think it is clear either way.


If the judge agrees with BHP on both issues...that a transfer didn't 'really occur' and no right of refusal, Peregrine will be ponying up for the courts costs for BHP and lawyer fees.

If the judge agrees with Peregrine on both the transfer did officially happen and it triggered the first right of refusal...then Peregrine may get it's lawyer fees covered plus potentially get the 2% royalty back as well...I guess the court would have to put a nominal value on it (another tough decision).

If the judge agrees with peregrine that the transfer did occur, but did not really trigger a first right of refusal...then I suspect that each party would have to cover their own lawyer's costs and the royalty stays with BHP Canada and the court is dismissed.

More to come. Maybe soon.


  1. This comment has been removed by a blog administrator.

  2. Goes out for anyone. If you don't like this free interpretation of this update on the royalty in courts...please feel free to shell out $12 to pay for the several documents available from the BC Judicial system.

  3. This comment has been removed by a blog administrator.