Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
That latest press release (of 18th January 2021) was shocking… shocking and shameful! If anything, it represents a very bad omen for the future. For already having reneged the payment terms once, they breached those very, renegotiated articles by simply not paying and keeping quiet. Only after enquiry from Asiamet’s board long after the payment due date, did they request consideration of amendments to the payment schedule as previously agreed.
Even if the first renegotiation was initially not considered a red flag, this second one IS, and it only affirms that the first one actually WAS a red flag as well. A double red flag, therefore. As such, it can be concluded that both Aeturnum and its shell company PT WIN are neither honourable nor credible. As continued association with said parties forms a reputation risk for the entire project, the board of Asiamet would do well to abandon these shysters, as they have been rightfully referred to in this forum, and instead, explore other suitors.
In so far that the remaining due diligence on Aeturnum and PT WIN has not been completed, it should never be, or be completed unsuccessfully. In so far that it was completed successfully, it should be revoked at once. Due diligence must presumably have shown that the required funds were neither in the bank, nor correctly designated.
Also, the deal should not have been structured with PT WIN but with its controlling shareholder Aeturnum instead. As it was however structured with that shelf company PT WIN, it should, prima facie, have been accompanied by solid, and separate guarantees from Aeturnum.
If this, or similar actions to the same effect, was not done, it reflects badly, especially on the advisors and non-executive directors of our company, the more so as the entire deal (read: disposal) is considered a ‘related party transaction’, where the arm’s length principle is inherently at stake. Again, the board should abandon the deal. Naive as it may be and if it doggedly can’t let go, it should not reconsider it without priorly securing additional and separate guarantees both from Aeturnum and its private/beneficial owners.
Incidentally, who are the owners and directors of Aeturnum and PT WIN? A proper, corporate presentation on the ‘purchaser’ has been manifestly lacking in this entire process. How can shareholders be ensured that the boards of Aeturnum and PT WIN have the required track record, experience and skills to actually develop the mine? I am not convinced they do. Rather, they appear to be a bunch of voracious speculators of the unscrupulous kind!
Thank you for your research into Aeturnum, MountTeide. Troubling, though useful, nonetheless.
Do we have any information regarding Aeturnum’s commodities trading business? What sort of volumes are being traded, and how profitable is this business actually?
A corporate presentation about Aeturnum, as a related party in the Proposed Transaction, appears to be missing though is much needed in order for Asiamet’s shareholders to fully assess the ins and outs of the forthcoming transaction.
If Manini attested to the “high level of professionalism” and “integrity” of Aeturnum (Aeturnum Energy International Pte Ltd), can we then at least expect a corresponding, professional corporate presentation of this particular related party?
There are a number of things that do not sit well from a corporate governance point of view, most importantly is the fact that the shareholders are once again being asked to raise the authorised capital, and this time by not less than 67% (from $ 15M to $ 25M). Cf. the form of proxy for the AGM to be held on 30 June 2020. In recent years it was raised from $ 8M to 10M (in 2017) to 12M (2018) and to $ 15M in 2019. While the previous increments were fully justified in view of the fact that there was no bankable feasibility study (BFS), now there is, which means that the BKM-project is bankable.
Recalling that jointly with Aeturnum Energy PTY LTD, company directors, with Mr Feng (Bruce) Sheng taking the lion’s share, have recently acquired a very significant portion of newly issued shares at a share price of no more than its nominal value. “Strategic partner” Aeturnum – rightfully referred in this chat forum as “voracious” – was clearly unwilling to pay a just and equitable premium to the price for the tremendous goodwill that the company and its local foundation (Yayasan Tambuhak Sinta or YTS) have created with the local indigenous population over the years - a sine qua non for a viable mine in the future. Company directors have completely and utterly failed to negotiate a proper and decent premium from the incoming “strategic partner”, no doubt due to the fact that they themselves were going to buy as many shares as they could, which they did.
It is unmistakable that the interests of the shareholders are not properly looked after. For one, where were the independent directors when all of this happened? Shareholders, who are mostly minority shareholders, have been taken for an absolute ride. And this, due to significant managerial control, is likely to happen again in the future.
Allowing the authorised capital to grow unchecked (as is being proposed) is an extremely worrisome, alarming and adverse development. Shareholders should en masse vote against this (resolution no. 8) and I call on every shareholder to do so. Instead, once a deal with Aeturnum – apparently for the entire KSK property – is reached, such deal should then be put to a vote (to the shareholders) in a general meeting (possibly together with any explained increase in authorised capital). This, rather than a priori issuing the company directors with a carte blanche, is the right thing to do. This due process not only justifies any controlled increase in the authorised capital, it will also ensure that the Board of Directors are acting in the best interest of the shareholders as they will first have to sell and defend the deal to the shareholders before the company ultimately accepts it on their behalf.
Furthermore, control of the growth of the authorised capital will protect shareholders against unnecessary dilution (antidilutative) and is expected to enable the share price to move-up for a change (which should help the Board in negotiating a better deal).
Assets are world-class indeed, but Tony’s conundrum is to solicit sufficiently attractive proposals given the rather underrated share price of today. A weak share price means more dilution for existing shareholders when new capital is raised, and this doesn’t help in getting the share price to lift off, on the contrary. Better to sit it out (the Coronavirus), do some cost cutting (if necessary) and negotiate a deal when the momentum is up.
Indeed, ride it out (the Coronavirus). Consolidate (following relocation of the headquarters of the company). Focus on news flow from the exploration results and reinforce the team.