- Australian Securities and Investments Commission launches civil action against Australian Mines Limited (AUZ) for allegedly breaching continuous disclosure obligations
- AUZ Managing Director Benjamin Bell also accused of breaching his directors’ duties
- ASIC alleges Mr Bell presented false and misleading statements at mining investment conferences in Hong Kong and London between April and May 2018
- It’s also alleged Mr Bell did not comply with the JORC Code
- Australian Mines intends to defend the allegations
- AUZ shares dropped 20.6 per cent to trade at 12.5 cents per share
The Australian Securities and Investments Commission has launched legal action in the Federal Court against Australian Mines (AUZ) and the company’s Managing Director Benjamin Bell for allegedly breaching continuous discoloured obligations.
The ASIC allegations relate to an offtake agreement with SK Innovation for cobalt and nickel product from Australian Mines’ Sconi project in Queensland.
ASIC alleges Mr Bell presented false and misleading information at mining investment conferences in Hong Kong and London in 2018, including that the company had secured funding from SK Innovation for its construction of a plant for the Sconi project, expected to cost $500 million, when no such agreement existed.
And he allegedly misleadingly stated that the value of the offtake agreement was $5 billion when the terms of the agreement included a potential buyer’s discount of 15 per cent.
ASIC says Mr Bell’s $5 billion valuation did not comply with the JORC Code.
A video of Mr Bell’s London presentation was then uploaded to YouTube.
Australian Mines subsequently retracted the claims made by Mr Bell at the London conference.
ASIC is seeking monetary penalties from Australian Mines and for Mr Bell to be disqualified from managing a corporation.
Australian Mines says it will defend the proceedings.
AUZ shares dropped 20.6 per cent to trade at 12.5 cents per share at 1:05 pm AEST.