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Metal mining company sued for termination pay

Allan Kelly Riversgold
Allan Kelly Riversgold

A former director is taking a precious metal resource company, which he helped found, to court over entitlements he believes are owing.

Allan Kelly is suing Riversgold for $121,000 he claims should have been paid when he resigned from the company on 26 March 2019.

The company confirmed it will dispute the claim.

“Riversgold Limited advises that it has lodged proceedings in the Supreme Court of Western Australia to set aside a statutory demand issued by former managing director Allan Kelly, pursuant to Section 459G of the Corporations Act 2001 (Cth),” Riversgold chairman Rod Webster said in a statement to the Australian share market.

Webster acknowledged Kelly had already served the company with a statutory demand on 9 April 2019, claiming an amount of $121,000 due for a payment in lieu of notice, after he stepped down. However, he is not convinced the company should pay him the amount.

“Having considered the circumstances behind the statutory demand, the company has made the decision to apply to have the statutory demand set aside on the basis that there is a genuine dispute as to whether the debt claimed by Kelly is due and payable,” he said.

When Kelly resigned as CEO and executive director of the company, Webster assumed the interim executive role until the company had finished recruiting a replacement.

QMEB understands at the time Kelly owned 10,010 ordinary shares in the company which, at the current trading price of $0.027 per unit, could be worth $270.27. Kelly also had 1,000,000 unlisted options worth 20 cents per unit or a total of $200,000.

The Board has separately appointed Kevin Hart as a non-executive director of the company, following the shock resignation of founding director Jeff Foster that took effect on March 31.

“Foster has been on the Board of Riversgold since its inception in April 2017,” Webster said. “Hart has been Riversgold’s company secretary since February 2017 and has over 30 years of experience in accounting, management and administration of publicly listed companies in the mining and exploration industries.”

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