Cougar Metals NL said it believes DNI Metals Inc. further breached their earn-in agreement as it did not hold the required permits for many of the works, including drilling, conducted on the Toamasina graphite project in Madagascar.

The Madagascan Mines Department told the company that the exploration permit covering the Toamasina project, also known as Vohitsara, is in the name of Mamy Estelle Randrianasolo, and is being converted to an exploitative permit in the name of DNI.

Cougar is seeking arbitration over the default notice from DNI concerning the March earn-in agreement, under which Cougar was earning a 50% stake in the Toamasina project.

DNI alleges that Cougar was required to complete an NI 43-101-compliant resource report on the project by June 30 and failed to produce the report despite being granted multiple extensions to Nov. 20.

Meanwhile, Cougar Executive Chairman Randal Swick and driller Amarildo Moura lodged a statement of claim with the Canadian Courts and served on DNI, according to the Dec. 19 release.

The statement of claim alleges that the company and its directors failed to withdraw the charges against Moura, who was arrested, and Swick even after being advised that the claims were not based on fact.

The charges against Moura were eventually withdrawn by DNI on Oct. 27, but the charges against Swick are still in place.