Avoid a Funding Collapse: Padbury Minings $6.5bn Iron Ore Fallout
Trade for Padbury Mining is still suspended, weeks after ASIC and the ASX began investigating possible inadequate disclosure practices related to their Oakajee port project announcement.
The Oakajee port and rail project in Australia, which has been promised by several parties over the course of the last 30 years, has once again come to a halt. Padbury Mining has temporarily withdrawn its plan to revive the $6.5 billion project because of its failure to respond to ASIC’s concerns over the source of project funding.
The Perth-based junior explorer announced April 11th that the company had raised all of the equity needed to build the port and rail. At first Padbury Mining did not name the financing entity, but it was later revealed that one of eccentric Sydney businessman Roland Bleyer’s companies was behind the deal.
When questioned by the ASX and ASIC over the details of the funding, Padbury did not – or could not – disclose the ultimate source of the funding, or if security arrangements were in place. Their inability to provide the regulators with sufficient information led the company into a trading halt, which continues through the beginning of May.
The halt to trading was established due to Padbury’s possible inadequate disclosure. The ASIC is investigating trade in Padbury stock leading up to the company’s big April 11th announcement as well. Padbury has been given the opportunity to provide more details for investors, but has so far missed its three self-imposed deadlines.
Although Bleyer has stated that Padbury would have the money for the start of the project by the end of the week from a bank in the Cayman Islands, Padbury has reason to jump into containment mode. Bleyer, who in the past has claimed three separate knighthoods and an honorary doctorate and professorship, has had decades of legal troubles regarding his worldwide business ventures.
Bleyer lived in the US throughout the 90s, and collected two credit card fraud chargers, two drug related charges and an alleged business fraud charge in his time spent stateside. All have subsequently been dropped. In the early 2000s, business plans in Greece, Azerbaijan and Malayasia all fell through because of an inability to provide adequate funding.
Because of Bleyer’s failure-ridden business past, Padbury has attempted to combat the continuing bad press with the announcement that the company has signed a deed of termination with Superkite Pty Ltd, Bleyer’s company that was responsible for providing the funding for the project. However, the deed states that “Padbury will continue to actively explore all available opportunities to exploit its existing intellectual property with respect to the Oakajee project.”
The infrastructure project would service the mines of more than 20 companies in the mid-west, and open up a new iron ore export province for Australia. Gary Stokes, Padbury Mining’s CEO, has made it clear since their mid-April announcement that the company’s intentions were genuine. ASX is still demanding answers about whether the company provided adequate information at the time of the announcement.
Let this cautionary tale be a lesson to future entities looking to build at Oakajee or any other mining site – know the history of your investors, and be prepared to answer any questions regarding from where the funding is coming.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.