Kampala — THE High Court has stopped the Government from privatising Kilembe Mines Limited until a case filed by Uganda Gold Mines Limited, is finally decided.

"A temporary injunction is hereby granted restraining the defendant, its agents, employees, assignees and/or servants from participating in the privatisation and/ or disposal off of its assets, relevant to the MEFSA particularly the special mining lease 2151 and the surrounding exclusive exploration licence No. EL 0138 and the known and unknown mineral deposits there, pending final disposal of the main suit," the order reads in part.

The order that was granted by Justice Geoffrey Kiryabwire followed an application by Timothy Masembe-Kanyerezi, the lawyer representing Uganda Gold Mines Ltd in which he sought a temporary injunction to stop the sale of the company and its assets pending the disposal of the case by Uganda Gold Mines Limited disputing the move.

Uganda Gold Mines Limited (UGML) through MMAKS Advocates sued Kilembe Mines Limited (KML) seeking orders compelling KML to abide by its obligations undertaken during the Mineral Exploration and Feasibility Study Agreement (MEFSA) made between them.

UGML also seeks to recover $10,370,368 against KML as an award of special damages for breach of MEFSA agreement made by retired Justice Samuel Wambuzi, who presided over the arbitration. It also seeks general damages, interest plus costs of the suit.

UGML also seeks a permanent injunction restraining the KML from participating in its (KML's) privatisation relevant to MEFSA, most particularly the special mining lease 2151 and the surrounding exclusive exploration licence No EL 0138 and the known and unknown mineral deposits there, while its (UGML's) rights under the MEFSA agreement still subsists.

According to an affidavit by the director of the Privatisation Unit, David Ssebabi, the Government policy and strategy is that the divestiture of KML would commence in June 2009 with a transaction advisory consultancy.

The same record states that the Government hired a transaction advisor from J. T, Boyd Company at a cost of $1,420,789 to carry out a technical a technical assessment of KML in order to guide the Government in deciding the best available divestiture option.