TIDMCAS
RNS Number : 8237P
Crusader Resources
13 February 2019
For immediate release
13 February 2019
Crusader Resources Limited
("Company" or "Crusader")
Section 249D Request Notice of General Meeting
Crusader Resources Limited (ASX:CAS; AIM:CAS) (the Company)
announced on 29 January 2019, that the Company had received a
notice under section 249D of the Australian Corporations Act 2001
(Cth) (Section 249D Notice) requesting the directors to convene a
meeting of the members of the Company (Meeting). The Section 249D
Notice requests that the Meeting considers the following
resolutions ("Resolutions"):
1. Election of Director - Mr. Brett Clark
2. Election of Director - Mr. David Sanders
3. Election of Director - Mr. Carl Luttig
4. Removal of Director - Mr. Marcus Engelbrecht
5. Removal of Director - Mr. Andrew Vickerman
Under section 249D, the Directors must call the meeting within
21 days after the request is given to the Company and the meeting
is to be held not later than 2 months after the notice of request
has been received. The Company has therefore published today a
document to shareholders ("Document") to convene a General Meeting
of the Company to be held at 2pm AEST on 22 March 2019, Clarion
Suites Gateway, 1 William Street, Melbourne, Victoria,
Australia.
A copy of the Document is set out in full below in the Appendix
of this announcement without material amendment or adjustment.
Special note concerning the Market Abuse Regulation
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). The person who arranged for the release of this
announcement on behalf of the Company was Marcus Engelbrecht,
Managing Director.
Website
A copy of this announcement is available from the Company's
website at www.crusaderresources.com
Enquiries:
Crusader Resources Limited
Mr. Andrew Beigel Office (Australia): +61 8 9320
CFO / Company Secretary 7500
Email: andrew@crusaderresources.com
Beaumont Cornish (Nomad) Tel: +44 (0) 20 7628 3396
Roland Cornish / Michael Cornish Email: corpfin@b-cornish.co.uk
Camarco (Financial PR) Tel +44(0)20 3757 4997 / +44(0)20
Gordon Poole / Nick Hennis 3781 8330
/ Thayson Pinedo
H&P Advisory (Joint Broker) Tel: +44 (0) 20 7907 8500
Neil Passmore / Andrew Chubb
/ Ernie Bell
Pinnacle Corporate Finance Tel: +61 8 6141 6306
(Corporate Adviser)
Andrew Frazer
CAUTION REGARDING FORWARD LOOKING STATEMENTS
Information included in this release constitutes forward-looking
statements. Often, but not always, forward looking statements can
generally be identified by the use of forward looking words such as
"may", "will", "expect", "intend", "plan", "estimate",
"anticipate", "continue", and "guidance", or other similar words
and may include, without limitation, statements regarding plans,
strategies and objectives of management, anticipated production or
construction commencement dates and expected costs or production
outputs.
Forward looking statements inherently involve known and unknown
risks, uncertainties and other factors that may cause the company's
actual results, performance and achievements to differ materially
from any future results, performance or achievements. Relevant
factors may include, but are not limited to, changes in commodity
prices, foreign exchange fluctuations and general economic
conditions, increased costs and demand for production inputs, the
speculative nature of exploration and project development,
including the risks of obtaining necessary licences and permits and
diminishing quantities or grades of reserves, political and social
risks, changes to the regulatory framework within which the company
operates or may in the future operate, environmental conditions
including extreme weather conditions, recruitment and retention of
personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its
management's good faith assumptions relating to the financial,
market, regulatory and other relevant environments that will exist
and affect the company's business and operations in the future. The
company does not give any assurance that the assumptions on which
forward looking statements are based will prove to be correct, or
that the company's business or operations will not be affected in
any material manner by these or other factors not foreseen or
foreseeable by the company or management or beyond the company's
control.
Although the company attempts and has attempted to identify
factors that would cause actual actions, events or results to
differ materially from those disclosed in forward looking
statements, there may be other factors that could cause actual
results, performance, achievements or events not to be as
anticipated, estimated or intended, and many events are beyond the
reasonable control of the company. Accordingly, readers are
cautioned not to place undue reliance on forward looking
statements. Forward looking statements in these materials speak
only at the date of issue. Subject to any continuing obligations
under applicable law or any relevant stock exchange listing rules,
in providing this information the company does not undertake any
obligation to publicly update or revise any of the forward looking
statements or to advise of any change in events, conditions or
circumstances on which any such statement is based.
APPIX 1
CRUSADER RESOURCES LIMITED
ACN 106 641 963
NOTICE OF GENERAL MEETING
A General Meeting of the Company will be held at Clarion Suites
Gateway, 1 William Street, Melbourne, Victoria, on Friday, 22 March
2019 at 2pm (AEST)
The Directors recommend Shareholders
vote AGAINST all Resolutions
This Notice and the accompanying Explanatory Memorandum should
be read in its entirety. If Shareholders are in doubt as to how
they should vote, they should seek advice from their accountant,
solicitor or other professional adviser prior to voting.
Should you wish to discuss any matter please do not hesitate to
contact the Company Secretary by telephone on +61 8 9320 7500.
Shareholders are urged to attend or vote by lodging the proxy
form attached to this Notice.
CRUSADER RESOURCES LIMITED
ACN 106 641 963
NOTICE OF General Meeting
Notice is hereby given that a general meeting of Shareholders of
Crusader Resources Limited (Company) will be held at Clarion Suites
Gateway, 1 William Street, Melbourne, Victoria, on Friday, 22 March
2019 at 2pm (AEST) (Meeting).
The Explanatory Memorandum provides additional information on
matters to be considered at the Meeting. The Explanatory Memorandum
and the Proxy Form comprise part of the Notice.
The Directors have determined pursuant to regulation 7.11.37 of
the Corporations Regulations 2001 (Cth) that the persons eligible
to vote at the Meeting are those who are registered as Shareholders
at Wednesday, 20 March 2019 at 2pm (AEST).
Terms and abbreviations used in this Notice and the Explanatory
Memorandum are defined in Section 6 of the Explanatory
Memorandum.
AGA
1. Resolution 1 - Appointment of Mr Brett Clark as a Director
To consider, and if thought fit, pass as an ordinary resolution
the following:
"That pursuant to Article 10.2(c) of the Constitution of the
Company, Mr Brett Clark, having consented to act, be elected a
director of Crusader Resources Limited with effect from the end of
the general meeting of Crusader Resources Limited at which this
resolution is passed."
The Directors unanimously recommend that Shareholders vote
AGAINST this Resolution
2. Resolution 2 - Appointment of Mr David Sanders as a Director
To consider, and if thought fit, pass as an ordinary resolution
the following:
"That pursuant to Article 10.2(c) of the Constitution of the
Company, Mr David Sanders, having consented to act, be elected a
director of Crusader Resources Limited with effect from the end of
the general meeting of Crusader Resources Limited at which this
resolution is passed."
The Directors unanimously recommend that Shareholders vote
AGAINST this Resolution
3. Resolution 3 - Appointment of Mr Carl Luttig as a Director
To consider, and if thought fit, pass as an ordinary resolution
the following:
"That pursuant to Article 10.2(c) of the Constitution of the
Company, Mr Carl Luttig, having consented to act, be elected a
director of Crusader Resources Limited with effect from the end of
the general meeting of Crusader Resources Limited at which this
resolution is passed."
The Directors unanimously recommend that Shareholders vote
AGAINST this Resolution
4. Resolution 4 - Removal of Mr Marcus Engelbrecht as a Director
To consider, and if thought fit, pass as an ordinary resolution
the following:
"That pursuant to Article 10.3(h) of the Constitution of the
Company, Mr Marcus Engelbrecht be removed as a director of Crusader
Resources Limited with effect from the end of the general meeting
of Crusader Resources Limited at which this resolution is
passed."
The Directors unanimously recommend that Shareholders vote
AGAINST this Resolution
5. Resolution 5 - Removal of Mr Andrew Vickerman as a Director
To consider, and if thought fit, pass as an ordinary resolution
the following:
"That pursuant to Article 10.3(h) of the Constitution of the
Company, Mr Andrew Vickerman be removed as a director of Crusader
Resources Limited with effect from the end of the general meeting
of Crusader Resources Limited at which this resolution is
passed."
The Directors unanimously recommend that Shareholders vote
AGAINST this Resolution
BY ORDER OF THE BOARD
Andrew Beigel
Company Secretary and Chief Financial Officer
Dated: 12 February 2019
CRUSADER RESOURCES LIMITED
ACN 106 641 963
EXPLANATORY MEMORANDUM
1. Introduction
The Explanatory Memorandum has been prepared for the information
of Shareholders in connection with the business to be conducted at
the Meeting to be held at Clarion Suites Gateway, 1 William Street,
Melbourne, Victoria, on Friday, 22 March 2019 at 2pm (AEST).
The Explanatory Memorandum forms part of the Notice which should
be read in its entirety. The Explanatory Memorandum contains the
terms and conditions on which the Resolutions will be voted.
The Explanatory Memorandum includes the following information to
assist Shareholders in deciding how to vote on the Resolutions:
Section Action to be taken by Shareholders
2
Section Request for removal and election of Directors
3
----------------------------------------------
Section Directors' response to Request
4
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Section Resolutions
5
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Section Definitions
6
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Schedule Statement from Requisitioning Shareholders
1
----------------------------------------------
A Proxy Form is located at the end of the Explanatory
Memorandum.
Action to be taken by Shareholders
Shareholders should read the Notice including this Explanatory
Memorandum carefully before deciding how to vote on the
Resolutions.
A Proxy Form is attached to the Notice. This is to be used by
Shareholders if they wish to appoint a representative (a 'proxy')
to vote in their place. All Shareholders are invited and encouraged
to attend the Meeting or, if they are unable to attend in person,
sign and return the Proxy Form to the Company in accordance with
the instructions set out in the Proxy Form. Returning the Proxy
Form to the Company will not preclude a Shareholder from attending
or (subject to the voting exclusions set out in the Notice) voting
at the Meeting in person.
Please note that:
(i) a Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy;
(ii) a proxy need not be a Shareholder; and
(iii) a Shareholder entitled to cast two or more votes may
appoint two proxies and may specify the proportion or number of
votes each proxy is appointed to exercise. Where the proportion or
number is not specified, each proxy may exercise half of the
votes.
Proxy Forms must be received by the Company no later than 2pm
AEST on Wednesday, 20 March 2019, being at least 48 hours before
the Meeting.
For Shareholders who hold Shares on the UK register, the Form of
Proxy should be returned by 17 March 2019 at 5:00pm (UK time) and
for Shareholders who hold Shares electronically through the
Depositary Interest, the Form of Direction or vote via the Crest
system should be made by 16 March 2019 at 5:00pm (UK time).
The Proxy Form provides further details on appointing proxies
and lodging Proxy Forms.
The Chairperson of the Meeting intends to vote all undirected
proxies AGAINST the Resolutions.
2. Request for removal and election of Directors
As announced on 29 January 2019, by notice to the Company dated
24 January 2019, Mr William Richard Brown, Vitor Pty Ltd, Chinetti
Investments Pty Ltd and Parkwise Corporation Pty Ltd (together,
Requisitioning Shareholders) requested the Directors call and
arrange to hold a general meeting in accordance with section 249D
of the Corporations Act (Request).
The Request seeks the appointment of Mr Brett Clark, Mr David
Sanders and Mr Carl Luttig (together, Nominee Directors) as
Directors of the Company and the removal of Mr Marcus Engelbrecht
and Mr Andrew Vickerman as Directors of the Company.
A copy of the Request was attached to the notice of initial
substantial holder announced on 29 January 2019.
Pursuant to section 249D(1) of the Corporations Act, a general
meeting is required to be called upon the request of a member with
at least 5% of the votes that may be cast at a general meeting of
the Company.
As at midnight on the date before the Request was given to the
Company, the Requisitioning Shareholders held an aggregate of
25,464,178 Shares of the Company directly representing a voting
power of 5.07% in the Company.
Accordingly, the Directors have called and arranged to hold this
Meeting pursuant to the Request and in accordance with the
provisions of section 249D(5) of the Corporations Act. Shareholders
should note that all Resolutions contained in this Notice have been
proposed pursuant to the Request and not by the Board.
3. Directors' response to Request
Overview
Your Directors the subject of removal resolutions - Mr Marcus
Engelbrecht and Mr Andrew Vickerman - as well as Mr John Evans, who
is not the subject of a removal resolution, are unanimously of the
view that Shareholders should vote AGAINST each of the
Resolutions.
The Board strongly considers that it is in the best interests of
the Company as a whole to vote AGAINST the Resolutions for the
following key reasons:
The current Board is in advanced discussions regarding a
potential funding proposal from its major Shareholder. The Board
understands that this funding proposal will not be completed if the
Nominee Directors are appointed.
The Resolutions are in our view opportunistic and no funding
proposal has been provided to the Company or Shareholders.
(a) The Board is open to consideration of attractive corporate opportunities.
(b) The Board members that the Requisitioning Shareholders are
seeking to remove, have shown ongoing personal support for the
Company by investing in capital raisings and deferring their
payment entitlements.
These reasons are explained in further detail below.
Section 249P of the Corporations Act permits the Requisitioning
Shareholders to submit a statement for circulation to Shareholders
regarding the Resolutions and any other matter that may be properly
considered at the Meeting. The Requisitioning Shareholders have
provided the Company with a statement to be sent to Shareholders
(249P Statement). A copy of the 249P Statement is annexed as
Schedule 1.
The Requisitioning Shareholders make a variety of incorrect or
unsubstantiated statements in their 249P Statement. We have
addressed these below:
-- No details were provided of how a 50% reduction in corporate
overheads, with savings of over A$1.5m, could be achieved.
-- They have committed to undertake a maiden drilling programme
at the early stage Novo Astro Gold exploration project with no
indication as to how they might fund such a programme or what it
would be expected to deliver. They are also silent as to the
rationale as to why high risk early stage exploration will realise
value in a market currently focussed on development projects.
-- They suggest they could further optimise the Borborema Gold
Project (Borborema) which would yield a 30% increase in NPV,
without providing detail, and also that there had been a failure to
advance the Company's projects and the Borborema Bankable
Feasibility Study (BFS) in particular. As the Company has
indicated, it has well advanced the work required to finalise the
BFS at Borborema following extensive internal and external work
including substantial metallurgical test-work. It is currently
anticipating completing an externally reviewed BFS within 5 months
of receipt of funding. Further, the final permit required to
commence construction is expected to be received in the next 2
months. The Board does not believe it commercially prudent at this
stage to undertake any work other than finalisation of the
Borborema Project BFS.
-- With current funding constraints the Company chose not to
focus on exploration at the Juruena Gold Project (Juruena), however
current management were able to clean up the licensing situation
and position the asset ready for sale or external investment where,
as noted below, a number of interested parties had initiated
discussions.
-- The Requisitioning Shareholders state that the AIM listing
resulted in exorbitant corporate expenditure and no new investors
whereas over 60% of the nearly A$10m raised since the appointment
of the current management came from the UK. Further, as noted
below, both Mr Vickerman and Mr Engelbrecht have deferred part or
the majority of their employment entitlements. Management have also
initiated significant cost cuts.
The current Board is in advanced discussions regarding a
potential funding proposal from its major Shareholder. The Board
understands that this funding proposal will not be completed if the
Nominee Directors are appointed.
Background
On 1 October 2018, the Company announced that trading of its
securities on the ASX and AIM had been suspended pending
clarification of the Company's financial position, to enable it to
consider various proposed capital raising initiatives to provide
working capital and to progress the feasibility study of its
Brazilian Borborema Gold Project. The suspension on ASX is also
pending a response by the Company to queries from ASX regarding its
financial position.
The Directors had discussions with a number of providers of both
debt and equity funding and have now successfully completed:
an investment round raising a total of $2.4 million (before
costs) by the issue of notes; and
a placement of 22.5 million shares raising $225,000 (before
costs),
(together, Initial Fundraising).
The Company intends to follow the Initial Fundraising with a pro
rata entitlement issue to eligible shareholders (Entitlement
Issue).
The Company has also been undertaking a strategy of implementing
cost reductions. This has included a reduction in the size of the
Company's executive team, as well as the proposed cancellation of
the Company's shares from trading on AIM (subject to the receipt of
Shareholder approval being sought at the general meeting to be held
on 28 February 2019). Please refer to the Company's notice of
general meeting announced on 30 January 2019 for further details
regarding the proposed AIM cancellation.
With the Initial Fundraising now having completed and the cost
reduction strategies having been actioned, the Board considers that
on the successful completion of the Entitlement Issue, it will be
in a position to address the uncertainties noted by the Company's
auditor as the basis for its disclaimed opinion, and adequately
respond to the queries raised by ASX, such that its Shares will be
reinstated to quotation on ASX.
Copulos Group Proposal
The Board considers that resolving the current funding issues
and the successful completion of the Entitlement Issue is integral
to maintaining the solvency of the Company and ultimately being
reinstated to quotation on ASX.
As announced on 29 January 2019, the current Board is in
advanced discussions with the Company's largest Shareholder, the
Copulos Group, for a potential partial underwriting of A$3 million
of the Entitlement Issue (Proposal). The current Board understands
that this proposal will not be completed if the Resolutions are
passed such that the Board majority is constituted by the nominees
of the Requisitioning Shareholders.
The Board cautions that the terms of the Proposal remain
incomplete, and that there is no certainty that an agreement will
be reached. However, the discussions are progressing well and it is
anticipated that an agreement will be reached shortly after the
date of this Notice.
The Company's intention to undertake the Entitlement Issue was
first announced on 5 November 2018. Since this time, the Board has
been actively seeking potential underwriters for the Entitlement
Issue. The Company has also been exploring a range of
capital-raising alternatives over a number of months. The Board
considers that the Entitlement Issue and the Proposal (although not
complete), are materially superior to any other capital raising
alternative that have been offered by any other parties at this
time.
The Resolutions are in our view opportunistic and no funding
proposal has been provided to the Company or Shareholders.
With the Requisitioning Shareholders holding only approximately
5.07% of the Company's Shares, as at midnight on the date before
the request was given to the Company, their action is in our view
opportunistic, and their request for three of four seats on the
Board is out of all proportion to their holding and contrary to
principles of good corporate governance.
The Requisitioning Shareholders have provided the Company with a
statement pursuant to section 249P of the Corporations Act, which
is included in Schedule 1 of this Notice (Statement).
The Statement states that the Requisitioning Shareholders
believe that the Nominee Directors will, amongst other things,
minimise the funding required to remove the ASX imposed suspension
and recommence trading.
The Statement does not provide any details as to where such
funding will be sourced from nor of the details of the cost savings
they intend to implement. As noted above, the Proposal from the
Copulos Group will not be completed if the Nominee Directors are
appointed. Accordingly, the Board considers that approving the
Resolutions without any details of the proposed funding seriously
risks the Company's solvency.
The current Board considers that the Entitlement Issue, while at
a discounted price, is the most realistic strategy for raising the
funds required to put the Company in a position where it can
adequately address ASX's queries with a view to being reinstated to
trading.
The Board also does not intend on raising any funds over and
above what it considers to be reasonably necessary to maintain is
solvency and ultimately be reinstated to quotation on ASX.
Accordingly, the Board considers that the Resolutions are
opportunistic and risks the future solvency of the Company and the
good standing of its projects, and that the interests of the
Company and its Shareholders as a whole are best served by voting
AGAINST the Resolutions.
The Board is open to consideration of attractive corporate
opportunities.
The Company announced on 5 November 2018 that it is pursuing the
potential of a farm-in transaction in respect of the Juruena Gold
Project in light of the Company's core focus of developing
Borborema. The Company has already received initial expressions of
interest with regard to third parties interested in partnering with
Crusader in developing its 100% owned Juruena Gold Project in the
state of Mato Grosso in Brazil.
The Board remains committed to progressing value realisation
proposals for Juruena and would welcome any alternative proposals
in respect of its other projects or at a corporate level should
such proposals be provided on terms that the Board considers
reflects the value of the underlying assets.
The Board members that the Requisitioning Shareholders are
seeking to remove, have shown ongoing personal support for the
Company by investing in capital raisings and deferring their
payment entitlements.
The Requisitioning Shareholders are seeking to remove the
Chairman, Andrew Vickerman, and the Managing Director, Marcus
Engelbrecht.
Each of Mr Vickerman and Mr Engelbrecht have demonstrated
ongoing personal support for the Company.
Mr Vickerman participated in the Company's April 2018 capital
raise and, in addition, his Directors' fees have been deferred
since July 2018. Similarly, Mr Engelbrecht participated in both the
December 2017 and April 2018 capital raises and had, as at end
January 2019, not received any payments under his employment
contract since joining the Company in November 2017.
4. Resolutions
Resolution 1 - Appointment of Mr Brett Clark as a Director
The Request requisitioned a general meeting to propose a
resolution to appoint Mr Brett Clark as a Director.
In accordance with the requirements of the Company's
Constitution and the Corporations Act, the Company has convened the
Meeting to allow Shareholders to vote on the appointment of Mr
Brett Clark as a Director.
Details regarding the experience, background and ability of Mr
Brett Clark were not provided to the Company.
Recommendation: The Directors recommend that you VOTE AGAINST
this Resolution.
Resolution 1 is an ordinary resolution.
The Chairperson intends to exercise all available proxies
against this Resolution.
Resolution 2 - Appointment of Mr David Sanders as a Director
The Request requisitioned a general meeting to propose a
resolution to appoint Mr David Sanders as a Director.
In accordance with the requirements of the Company's
Constitution and the Corporations Act, the Company has convened the
Meeting to allow Shareholders to vote on the appointment of Mr
David Sanders as a Director.
Details regarding the experience, background and ability of Mr
David Sanders were not provided to the Company.
Recommendation: The Directors recommend that you VOTE AGAINST
this Resolution.
Resolution 2 is an ordinary resolution.
The Chairperson intends to exercise all available proxies
against this Resolution.
Resolution 3 - Appointment of Mr Carl Luttig as a Director
The Request requisitioned a general meeting to propose a
resolution to appoint Mr Carl Luttig as a Director.
In accordance with the requirements of the Company's
Constitution and the Corporations Act, the Company has convened the
Meeting to allow Shareholders to vote on the appointment of Mr Carl
Luttig as a Director.
Details regarding the experience, background and ability of Mr
Carl Luttig were not provided to the Company.
Recommendation: The Directors recommend that you VOTE AGAINST
this Resolution.
Resolution 2 is an ordinary resolution.
The Chairperson intends to exercise all available proxies
against this Resolution.
Resolution 4 - Removal of Mr Marcus Engelbrecht as a
Director
The Request requisitioned a general meeting to propose a
resolution to remove Mr Marcus Engelbrecht as a Director.
In accordance with the requirements of the Company's
Constitution and the Corporations Act, the Company has convened the
Meeting to allow Shareholders to vote on the removal of Mr Marcus
Engelbrecht as a Director.
The Company has provided the following information to assist
Shareholders.
Mr Marcus Engelbrecht - Managing Director
Marcus has nearly 33 years' experience in the global mining
industry including at Board level and as managing director of a
London-listed company. Marcus had various roles at BHP, including
Chief Financial Officer of the group's Diamond and Speciality
Products division. In 2009 he joined OceanaGold, an ASX/NZX/TSX
listed gold producer as Chief Financial Officer also acting, in
part, as CEO. Between 2011 and 2013, Marcus was Managing Director
and CEO of Archipelago Resources plc, formerly an AIM-quoted, gold
producer in Indonesia. Marcus was Chief Executive Officer of
Stratex International plc between September 2016 and November 2017,
joining Crusader shortly after the proposed merger between Stratex
International plc and Crusader (announced on 18 May 2017) was
terminated. Marcus also currently serves as a non-executive
Director of Xanadu Mines, an ASX-listed exploration company.
Recommendation: The Directors (other than Mr Marcus Engelbrecht,
who declines to make a recommendation on this Resolution) recommend
that you VOTE AGAINST this Resolution.
Resolution 4 is an ordinary resolution.
The Chairperson intends to exercise all available proxies
against this Resolution.
Resolution 5 - Removal of Mr Andrew Vickerman as a Director
The Request requisitioned a general meeting to propose a
resolution to remove Mr Andrew Vickerman as a Director.
In accordance with the requirements of the Company's
Constitution and the Corporations Act, the Company has convened the
Meeting to allow Shareholders to vote on the removal of Mr Andrew
Vickerman as a Director.
The Company has provided the following information to assist
Shareholders.
Mr Andrew Vickerman - Non-Executive Chairman
Andrew is currently a member of the Board of Trafigura Pte Ltd
an independent commodity trading and logistics house, and chairman
of Direct Nickel Holdings UK Limited, a business that has developed
technology for processing nickel laterite deposits. Mr Vickerman
was a non-executive director at Petropavlovsk PLC, a London listed
mining company with assets in Russia, between October 2015 and June
2017. Prior to the above appointments, Mr Vickerman spent almost 20
years with Rio Tinto, the last 10 years as a member of the
Operations and Executive Committees with responsibility for global
communications and external relations. In the mid-90s he spent four
years as Finance Director of Lihir Gold and led the U$750 million
financing of the Lihir Gold project. An economist by background he
has previously worked for The World Bank and other international
agencies
Recommendation: The Directors (other than Mr Vickerman, who
declines to make a recommendation on this Resolution) recommend
that you VOTE AGAINST this Resolution.
Resolution 5 is an ordinary resolution.
The Chairperson intends to exercise all available proxies
against this Resolution.
5. Definitions
In the Notice and this Explanatory Memorandum, words importing
the singular include the plural and vice versa.
$ means Australian Dollars.
AEST means Australian Eastern Standard Time, being the time in
Melbourne, Victoria.
AIM means the market of that name operated by the London Stock
Exchange.
ASX means ASX Limited (ACN 008 624 691) and, where the context
permits, the Australian Securities Exchange operated by ASX.
Board means the board of Directors.
Company or Crusader Resources means Crusader Resources Limited
(ACN 106 641 963).
Corporations Act means the Corporations Act 2001 (Cth).
Director means a director of the Company.
Entitlement Issue has the meaning given in Section 4.2.
Explanatory Memorandum means this explanatory memorandum
attached to the Notice.
Initial Fundraising has the meaning given in Section 4.2.
London Stock Exchange means the London Stock Exchange PLC.
Meeting has the meaning given in the introductory paragraph of
the Notice.
Nominee Directors has the meaning given in Section 3.
Notice means the notice of general meeting.
Proposal has the meaning given in Section 4.2.
Proxy Form means the proxy form attached to the Notice.
Request has the meaning given in Section 3.
Requisitioning Shareholders has the meaning given in Section
3.
Resolution means a resolution contained in the Notice.
Section means a section of this Explanatory Memorandum.
Shareholder means a shareholder of the Company.
Schedule 1 - Statement from Requisitioning Shareholders
On 1 October 2018 Crusader Resources Limited was subject to an
exchange enforced suspension from trading on the Australian Stock
Exchange (ASX). This action has had a materially negative effect on
all shareholders and must be addressed to ensure the future of the
Company.
The current Chairman and Managing Director along with their
London based advisory teams should take responsibility for the
destruction of shareholder value leading up to the enforced
suspension as well as the unexplained delays in meeting the ASX
requirements for lifting the suspension and must be held to
account.
We have called this meeting to achieve:
1. Removal of underperforming Directors.
2. Re-instatement of Crusader to trading on the ASX.
3. Minimisation of dilution to existing shareholders by reducing
working capital requirements for relisting whilst still progressing
the company's projects.
Our proposed new Board is committed to delivering:
1. Up to 50% reduction in corporate overhead costs estimated to
save shareholders more than $1,500,000 annually.
2. Maiden Drilling program at the Novo Astro Gold project.
3. Low cost re-optimisation of the Borborema Gold Project
targeting a 30% or greater increase in NPV.
A vote for the new Board members will ensure that experienced
Brazilian based gold professionals manage the company's projects.
The incoming Board has commitments from Brazilian based operators
to begin working immediately on reducing the cost of operations in
Brazil whilst fast-tracking project development.
The current Managing Director Marcus Engelbrecht became involved
with Crusader in May 2017 as part of a proposed corporate
transaction and was appointed Managing Director on 20 November
2017. The current Chairman Andrew Vickerman was appointed on 18(th)
April 2018.
The Company's share price has fallen from 12cps in May 2017 to
5.5cps in April 2018 and the Company is now proposing a rights
issue at a price as low as 0.5cps. The Company has also recently
placed shares at 1cps, representing a fall in market capitalisation
from $35M to just over $5M - the destruction of nearly $30M in
shareholder value and 91% share price fall.
Over this period the Company also issued more than 200,000,000
new shares, incurred short term debt greater than $1,400,000 and is
now proposing to issue up to an additional 500,000,000 shares.
Salaries for the UK Board are at the extreme upper quantum for a
junior mining company. Marcus Engelbrecht's remuneration is
approximately $500,000pa in guaranteed payments with additional
short-term bonus payments available and the non-executive chairman
is paid $120,000pa.
Clearly unsustainable expenses for a junior mining company have
been incurred. The secondment of decision making to third party
advisors is unsustainable with Crusader's corporate expenditure
over the UK listing period alone in excess of $5,000,000.
The reasons for calling a shareholders meeting are as
follows:
1. Unsustainable costs and corporate overheads with management
displaying inability to control a small company structure.
a. Exorbitant expenditure on consultants including the
appointment of multiple brokers and advisors to the Company. These
advisors have neither generated buying activity nor introduced any
new major investors to the current register.
b. UK based management come from a large company background and
lack the correct skills to operate without substantial and
expensive support.
2. Failure to develop a reasonable knowledge of the Company's expenditures & liabilities.
a. Marcus Engelbrecht has spent only 3 days in Brazil since
being appointed approximately 15 months ago.
b. ASX enforced suspension of the company due to avoidable delays in executing funding options.
3. Failure to advance projects - Lack of tangible advancement on core assets.
a. Borborema BFS not commissioned.
b. No meaningful exploration at Juruena.
Crusader promoted to the market that the BFS study would be
delivered in 2018. As an engineering firm has not been engaged to
complete a BFS this was an impossible promise to fulfil damaging
the Company's credibility.
4. No ability to maintain share market performance displaying a
lack of understanding of small company market dynamics.
a. No share market support despite continuing to pay brokers monthly mandated fees.
b. Failure to address negative market commentary and press as
displayed by SP Angel articles that have been circulated globally
deterring investors from considering the Company.
c. Negligible volume trading on the AIM market.
5. Poor execution of the AIM listing.
a. Failure to deliver on prospectus representations specifically
cost cutting commitments in Brazil.
b. It is our view that assumptions regarding cost reductions
were indiscriminate with insufficient care taken to determine
whether the proposed cuts were realistic or able to be practically
delivered.
c. Capital Markets are now unwilling to support the UK listing and cost structure.
New Strategy
The Shareholders represented in the Section 249D notice believe
the proposed Directors are the right "can do" people to implement
their plan to relist the Company on the ASX and reduce the monthly
burn rate allowing for a smaller and less dilutionary capital
raising to satisfy the listing requirements.
1. Reduce all costs associated with the AIM listing.
2. Reduce Brazil cost immediately through:
a. "Boots on the ground" approach to cost cutting.
b. Generate positive news flow on the projects at minimal cost
(the lowest cost value accretive action)
i. Optimisation of the Borborema Gold Project rather than
expensive BFS.
ii. Complete a maiden drill program at Novo Astro.
3. Minimise the funding required to remove the ASX imposed suspension and recommence trading.
4. DO NOT issue $4,000,000 worth of shares whilst the Company is
distressed. The new directors will do everything to avoid issuing
any unnecessary stock at such distressed prices.
5. The new Board will review all proposals previously presented
to the company to assist with the exploration and development of
the two existing gold projects and consider all commercially
reasonable offers.
6. The new Board will meet with all major stakeholders and
endeavour to bring all parties together in support of a defined
united strategy.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLLFETFTIFLIA
(END) Dow Jones Newswires
February 13, 2019 02:00 ET (07:00 GMT)
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