Celsius Resources fights to protect 40% MMCI stake from foreclosure and auction

What has Celsius Resources announced?

Celsius Resources Limited has issued a further update on the legal dispute threatening its 40% interest in Makilala Mining Company Inc. (MMCI).

Equinaire Holdings Limited is seeking to begin foreclosure proceedings and arrange a public auction of Celsius' MMCI interest. Celsius disputes both the alleged default underpinning that action and Equinaire's capacity to enforce the security and sell the stake.

For investors, this is a material asset-risk update rather than a routine legal filing. The immediate positive is that no foreclosure or auction has taken place and the parties have been directed to maintain the status quo. The clear negative is that Celsius has not yet secured a permanent resolution, while its temporary protection is time-sensitive.

The full details are available in the original company announcement.

The dispute in plain English

The disagreement centres on an Omnibus Loan and Security Agreement, or OLSA, between MMCI and Equinaire. An OLSA is an agreement setting out borrowing terms and the security available to a lender if obligations are not met.

Celsius said the OLSA was purportedly assigned by Maharlika Investment Corporation to Equinaire, a wholly owned subsidiary of India's Kiri Industries Limited.

Following that purported assignment, Equinaire issued three notices:

1. Notice of Event of Default - Equinaire claims that a Notice of Relinquishment issued to Sodor, Inc. constituted a default under the OLSA.
2. Notice of Commencement of Foreclosure Proceedings - Equinaire is seeking to enforce security over Celsius' 40% MMCI interest.
3. Notice of Disposition - Equinaire is seeking to initiate a public auction of that interest.

Celsius refutes the occurrence and continuation of an Event of Default. It also challenges Equinaire's ability to begin foreclosure proceedings and sell the company's MMCI interest.

These are Celsius' stated positions, not matters that have yet been finally determined by the court or through arbitration.

Where the court process stands

Celsius previously obtained a Temporary Order of Protection, known as a TOP, from the Regional Trial Court of Makati City. That order prevents Equinaire from proceeding with foreclosure or the disposition and auction of Celsius' MMCI interest.

Equinaire has since asked the court to lift the TOP so that it can proceed with an auction and sale. Celsius has filed its opposition and presented verbal arguments to the Regional Trial Court.

The court is still assessing Equinaire's application. In the meantime, it has directed the parties to maintain the status quo until the Motion to Lift TOP is resolved.

That means the threatened enforcement remains paused for now. However, this is interim protection rather than a final victory for Celsius.

Key point	Current position
Celsius' interest in MMCI	40%
Foreclosure completed	No
Public auction completed	No
Temporary protection	Currently preventing foreclosure and disposal
Motion to lift protection	Still being assessed
TOP expiry date	25 August 2026
Arbitration	Celsius intends to initiate it ahead of the TOP's expiry
Final outcome	Not disclosed and remains uncertain

Why 25 August matters

The Temporary Order of Protection is due to expire on 25 August 2026. Ahead of that date, Celsius intends to initiate arbitration under the OLSA to protect its interests.

Arbitration is a private dispute-resolution process in which an appointed arbitrator or panel decides the disagreement outside the ordinary court process. Importantly, Celsius said it intends to initiate arbitration. The announcement did not confirm that arbitration had already begun.

The immediate timetable therefore contains two moving parts:

• the Regional Trial Court's decision on Equinaire's request to lift the TOP; and
• Celsius' planned commencement of arbitration before 25 August.

No date for the court's decision was disclosed. The announcement also did not explain what protection would apply after 25 August if the court application or arbitration remained unresolved.

What investors can take as positive

The strongest positive is that Celsius retains its 40% MMCI interest at the date of the announcement. Equinaire has issued notices and is seeking enforcement, but the foreclosure and auction have not been completed.

Celsius has also obtained temporary court protection, formally opposed Equinaire's motion and presented verbal arguments. The status quo direction provides a further immediate barrier to an auction while the motion is being assessed.

The company is not treating the process passively. Its stated intention to use arbitration shows that it plans to pursue another contractual route to protect the stake.

For investors following complex resource-company transactions, the distinction between signing documents, issuing notices and actually completing enforcement is crucial. A similar focus on completion risk applies when assessing ALT Resources' proposed Tartana Minerals transaction and AIM admission.

The risks remain substantial

The central risk is straightforward: Equinaire is attempting to foreclose on and auction Celsius' entire 40% interest in MMCI.

The company may dispute the claimed default and Equinaire's enforcement capacity, but the outcome will depend on legal and contractual processes that remain unresolved. Investors do not yet have a final court ruling or arbitration decision supporting Celsius' position.

There is also timing risk. The TOP is due to expire on 25 August, Equinaire is actively trying to have it lifted, and Celsius has only stated an intention to begin arbitration.

Several potentially important details were not disclosed, including:

• the value attributed to Celsius' 40% MMCI interest;
• the amount allegedly outstanding under the OLSA;
• the potential financial cost of the dispute;
• an auction date or proposed sale terms;
• the expected duration of arbitration; and
• the consequences for Celsius if Equinaire ultimately succeeds.

Without those details, investors cannot reliably quantify the potential financial downside from this announcement alone.

What to watch next

The next update needs to clarify whether Celsius has formally commenced arbitration and what protection, if any, applies once the TOP reaches its scheduled expiry date.

Investors should also watch for the Regional Trial Court's decision on Equinaire's Motion to Lift TOP. If the motion is rejected, Celsius would preserve its immediate protection, although the wider dispute could continue. If it is granted, the risk of foreclosure and an auction could become more immediate, subject to any other legal protections Celsius secures.

For now, the status quo is holding and Celsius still owns its 40% interest. But this remains a live, time-sensitive dispute concerning a substantial company interest. Until there is a final ruling, settlement or arbitration outcome, legal uncertainty will remain a significant factor for Celsius Resources shareholders.