Possible Claim by Tennant Metals Pty Ltd and MIT Nominees Pty Ltd
August 12 2010 - 5:07AM
UK Regulatory
TIDMFND
For Release: 12 August 2010
FINDERS RESOURCES LIMITED
Possible Claim by Tennant Metals Pty Ltd and MIT Nominees Pty Ltd
Finders Resources (the Company) has been advised that possible legal claims may
be instigated by two minority shareholders in the Company. The Company believes
the claims are without foundation and, if legal proceedings commence, they have
little chance of success.
The claims have been made by Tennant Metals Pty Ltd (Tennant) and MIT Nominees
Pty Ltd (Meridian) in relation to certain historic reports, announcements and
presentations made by the Company.
Background
In early 2008, the Company placed an aggregate of 5,165,289 shares at $1.10 per
share to Tennant and Meridian as part of a financing to fund construction of the
Wetar Copper Project's Demonstration Plant (the Project). Tennant and Meridian
conducted their own due diligence as sophisticated equity investors. This
financing also included a secured loan agreement of US$5 million from Tennant
and Meridian (which was repaid in September 2009).
Possible claim
Tennant and Meridian have now indicated that they intend to commence legal
proceedings against the Company and /or its Directors based on the claim that
certain historic reports, announcements and presentations made by the Company in
relation to the timing and costs of the Project and its commercial development
were misleading or deceptive. Tennant and Meridian are seeking to recoup their
alleged loss on their initial capital investment, despite remaining the
registered holders of substantially all of the shares they subscribed for in
2008.
In essence, the basis of these claims is that, given the final cost and timing
of delivery of the now successful Project and its expected commercial
development, the Company could not at the time have had a reasonable basis for
its various announcements. The Company notes that Tennant and Meridian received
detailed and on-going information flow in respect of the Project during the
course of the loan financing arrangements. After an external legal review of
material underpinning its past announcements and after receiving legal advice
from the Company's legal advisers, the Company has rejected the allegations and
is confident that if any proceedings are commenced by Meridian and Tennant they
would have little chance of success.
The Company has rejected Tennant and Meridian's allegations.
Should any legal proceedings commence, the Company believes that the legal costs
and any potential liability can be managed by the Company in the ordinary course
of business and, to the extent relevant, within its directors and officers'
liability insurance arrangements.
The Company is continuing with its expansion program for the Project, which is
estimated will increase copper cathode production to 23,000 tonnes per annum.
The financing discussions for the expansion are now at an advanced stage. The
Company believes any legal proceedings would be unlikely to materially impact
the operational and financial management of the Company.
Finders Resources Ltd:
Russell Fountain Non-Executive Chairman +61 2 9211 8299
Chris Farmer Managing Director info@findersresources.com
Financial PR:
Stuart Carson FD Third Person (in Sydney) +61 2 8298 6100
Nick Elwes College Hill (in the UK) +44 20 7457 2020
RFC Corporate Finance Ltd - Nomad:
Rob Adamson Managing Director +61 2 9250 0000
Stuart Laing Executive Director +61 8 9480 2500
finnCap - Finders' Broker for the AIM market:
Matthew Robinson Corporate Finance Director +44 20 7600 1658
Joe Lunn Analyst +44 20 7600 1658
[HUG#1437470]
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All reproduction for further distribution is prohibited.
Source: Finders Resources Limited via Thomson Reuters ONE
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