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 Padbury Mining has temporarily withdrawn its plan to revive the $6.5 billion project because of its failure to respond to ASIC’s concerns over the source of project funding.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.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.