Contingent Value Rights
We have Contingent Value Rights (“CVRs”) outstanding that entitle the holders to an aggregate of 5.466% of certain proceeds from Venezuela associated with the collection of the Award and/or sale of Mining Data or an enterprise sale, as such terms are defined in the CVRs (the “Proceeds”), less amounts for certain specified obligations (as defined in the CVR), as well as a bonus plan as described below. As previously disclosed, we have been advised by the holder of the majority of the CVRs, a related party, that as a general matter it believes that the Company’s 45% interest in Siembra Minera represents “Proceeds” for purposes of the CVRs and as such it believes the CVR holders are entitled to the value of 5.466% of that interest on the date of its acquisition. Such holder, for its own account as an individual CVR holder, has made various specific requests of, assertions, claims and demands with respect to its CVR. For a variety of reasons, the Company does not agree with such holder’s position and believes it is inconsistent with the CVRs generally and such holder’s CVR specifically, including the terms and manner upon which we acquired our interest in Siembra Minera. The Company and such holder have not been able to resolve their differences. As the parties have been unable to reach agreement on a resolution, in July 2022 the Company and such majority holder entered into a Tolling Agreement pursuant to which both parties agreed to toll applicable statutes of limitations indefinitely with respect to such holder’s CVR, subject to each party’s right to terminate the Agreement and such tolling on 30-days advance written notice to the other party. At this time, it is not possible to determine the outcome of this matter.
As of September 30, 2022, the total cumulative obligation payable pursuant to the terms of the CVR from the sale of the Mining Data and collection of the Award was approximately $10 million, all of which has been paid to the CVR holders other than approximately $60,000 which has not yet been distributed (not taking into account the majority CVR holder’s claim, which has been tolled and remains unresolved as described above).
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