09/03/2011 Response to Shareholder Circular
9 March 2011
Company Announcement Office
Letter from Mr Tay to the Company’s shareholders
Yesterday the Company became aware that Mr Lewis Tay, a director of the Company, had sent the attached letter to the Company’s shareholders. The Company subsequently received a request from Mr Tay’s lawyers that the letter is announced to ASX.
The Independent Board Committee established to act on the Company’s behalf with respect to the forthcoming extra-ordinary meeting of the Company’s shareholders to be held on 21 March 2011 notes the following with respect to Mr Tay’s letter:
1. The Company considers the circular to shareholders dated 1 March 2011 to be accurate and disputes that it was either misleading or defamatory.
2. Mr Tay refers to three steps to (in his words) ensure optimum returns to shareholders. In the interests of ensuring that all shareholders are fully informed for the EGM, the Company notes that each of these steps is already under way:
(a) On 20 December 2010 the Company’s board unanimously approved an exploration program to continue exploration on its Prairie Downs tenements to identify high grade DSO targets to complement its 1b tonne detrital project. See announcements to ASX on 16 November 2010, 27 and 31 January 2011. The work commenced as planned in January 2011 and field work is, due to seasonal climatic conditions in the Pilbara region, due to commence in May 2011.
(b) The Company has for some time examined the infrastructure solutions best suited for its projects and various options have been identified for further consideration as part of its pre-feasibility study. Again this was the subject of board deliberations at a board meeting on 20 December 2010, as well as several other board and management meetings in 2010.
(c) As announced to ASX on 27 January 2011, the work program unanimously approved by the Company’s board will provide a systematic basis for many components of a pre-feasibility study, which will be commenced once the existing work programs have been finalised.
3. Mr Tay states that the Company was at all times aware of his share trading. At a board meeting immediately following shareholders’ rejection of the placement to Hebei Xinghua Iron and Steel Co on 27 September 2010, Mr Tay was asked to detail the Company’s holdings in securities. Mr Tay advised that, contrary to earlier directives of the board, he had not sold down the Company’s holdings in various speculative stocks but rather had continued active trading. The Company’s Chairman demanded that Mr Tay immediately cease all share trading activities by the Company, in response to which Mr Tay said that he would.
On 27 October 2010 and in response to a request from the Company’s chairman that Mr Tay confirm that he had ceased trading shares on behalf of the Company, Mr Tay advised that he had continued trading. On 28 October 2010 the Company’s chairman confronted Mr Tay, and demanded that Mr Tay immediately cease all trading using the Company’s name and funds. Mr Tay agreed to do so. The Company did not become aware that Mr Tay was continuing his share trading activities until early January 2011 following an internal investigation.
Mr Tay’s share trading activities during these periods were as follows:
- 28 September 2010 to 27 October 2010 7 buy trades with a total value of $176,998.40
- 28 October 2010 onwards 4 buy trades (including an application under a placement) with a total value of $150,352.48
The board only became aware of the trades between 27 September 2010 and 27 October 2010 following a request of Mr Tay, and subsequent trades following an internal investigation. At no stage did Mr Tay, of his own volition, advise the board of his share trading activities using the Company’s funds and name. Rather, Mr Tay advised the Company’s chairman twice during this period that his trading activities had ceased.
The Company maintains that Mr Tay’s actions were a direct and persistent defiance of a board directive and that the Board (Mr Richard Oh dissenting) had no option other than to immediately terminate his executive powers.
Letter from Messrs Levy, Carson and Anderson to the Company’s shareholders Attached is a statement the Company has received from Messrs Ian Levy, Malcolm Carson and Graham Anderson in response to the resolutions seeking their removal as directors of the Company, and which the Company will circulate to all shareholders in accordance with section 203D of the Corporations Act.
Messrs Levy, Carson and Anderson have warranted to the Company that all the matters stated in their statement to be facts are in fact true and correct in every particular.
Authorised by the Independent Board Committee
For further information or enquiries please contact:
Fergus Ross at Six Degrees Investor Communication on 02 9230 0661