Brewer and vendor at loggerheads as mining deal goes sour
By James Atkinson
An ASX-listed craft brewer looks destined for a legal dispute over its ill-fated plan to enter the mining game.
Western Australia's Oz Brewing recently announced to the ASX that it would not go ahead with a plan to purchase mining licences from NSW bauxite explorer Volcan Australia Corporation (VAC), with the brewer alleging VAC had misrepresented its ownership of the assets.
Oz Brewing chairman David Wheeler declined to comment to TheShout about the fall-out from the affair – which now has his company pursuing VAC for a $2 million 'break free' – or on what a brewer is doing getting into mining in the first place.
But VAC director Sholom Feldman was incredulous at the allegations made publicly by Oz Brewing in its ASX announcement, which he said breached a confidentiality clause in the Heads of Agreement between the companies.
"I've got no idea why they've decided to go public, I don't understand how it helps their position," he said.
Feldman said there is no question that the mining assets were VAC’s to sell and he was mystified as to why the brewer had pulled out of the deal.
"If they unilaterally pull out, I don't understand how that's a break from our side," he said.
"We thought as far as the Oz Brewing shareholders were concerned, the company's obviously going nowhere, so it'd probably be a good deal all round."
Feldman said VAC is one of the larger holders of mining exploration licences in Australia.
"This is what I do for bread and butter. We've been doing this for many years, we know the business well."
"I don't know whether they know what they're doing… if they want to go into farming [next] I suppose they can do that," he joked.
Feldman said VAC is now considering its legal position in relation to the deal and Oz Brewing is likely to be liable for a lot more than the up-front payment of $400,000 it has already paid to the mining company.
"Hopefully it will end up well for the shareholders – I do feel for them," he said.
"I wouldn't like to be a shareholder in Oz Brewing at the moment."