Bauxite Resources : Dispute notice issued to Yankuang Resources

Bauxite Resources Limited has issued a dispute notice to Yankuang Resources Pty Limited (YRPL) pursuant to the terms of the Joint Venture Resource Agreement (JRVA) and the Alumina Refinery Joint Venture Agreement (ARJVA).

The disputes relate to:
(a) the differing views as to how to interpret the terms of the JRVA and ARJVA given that the parties cannot agree on the Annual Program and annual budget for 2015/16, specifically what Annual Program the Manager is required to adopt as governing the activities and expenditure of the joint ventures until such time as the dispute between the parties can be resolved; and
(b) the interpretation of the obligations of the parties under the ARJVA to approve an Annual Program and budget which is designed to see a full Refinery BFS completed by the contractual completion date.

At a joint venture committee meeting held last week, the joint venture Manager proposed the budget for the Refinery BFS. This budget was approved by Bauxite Resources Limited ("BRL") however YRPL did not approve the budget.

The Company has issued the dispute notice in an attempt to resolve above issues to ensure that YRPL performs its obligations under the JRVA and ARJVA.

The Company believes given the quality and size of the Felicitas bauxite deposit, the present time represents an exceptional opportunity for the parties to undertake the Refinery BFS. The current market conditions and exchange rate for the Australian dollar are such that the input costs for a Refinery BFS, the availability of service providers, and staffing costs are all likely to be substantially lower than they have been in recent years.