PERTH (miningweekly.com) – The Australian Securities and Investment Commission (ASIC) has launched civil proceedings in the Federal Court against ASX-listed Australian Mines, claiming the company had breached its continuous disclosure obligations and accusing MD Benjamin Bell of allegedly breaching his directors’ duties.

ASIC noted that in February 2018, Australian Mines had announced to the market that it had entered a term sheet for an offtake agreement with SK Innovation for the expected cobalt and nickel product from its Sconi project, in Queensland.

ASIC alleges that when Bell presented at mining investment conferences in Hong Kong and London between April and May 2018, he falsely claimed that Australian Mines had secured funding from SK Innovation for its construction of a plant for the Sconi project, expected to cost A$500-million or more, when in fact no one had offered or agreed such funding, and misleadingly stated that the value of the offtake agreement was A$5-billion when the terms of the agreement included a potential buyer’s discount of 15%.

ASIC further contends that Bell’s A$5-billion valuation did not comply with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).  

ASIC noted that a video of Bell’s London presentation was subsequently uploaded to YouTube.

In June 2018, Australian Mines publicly retracted claims Bell made at the London mining investment conference.

ASIC contends that Australian Mines failed in its obligation to disclose material information to the market. ASIC also contends that Bell failed to discharge his duties as a director with the requisite care and diligence that a reasonable person in his position would have exercised.

ASIC is seeking declarations that Australian Mines and Bell contravened provisions of the Corporations Act, orders for Australian Mines and Bell to pay pecuniary penalties, and that Bell be disqualified from managing a corporation. 

Australian Mines told shareholders this week that the company would defend the proceedings.