PHOSCO LTD ASX Announcement 28 October 2015
ACN 139 255 771 ABN 82 139 255 771
Level 4, 100 Albert Road South Melbourne VIC 3205
Contact:Phone: +61 (0)3 9692 7222 Fax: +61 (0)3 9077 9233
info@celamin.com Investor Relations: Stephen Nossal
Board of Directors:Martin Broome, Chairman Nic Clift, Managing Director
Sue‐Ann Higgins, Non‐Exec Director Tim Markwell, Non‐Exec Director
Melanie Leydin
Securities on IssueCNL:993,171,986 ordinary shares CNLCA: 14,887,796 partly paid shares
Quarterly Activity & Cashflow Reports for Quarter ending 30 September 2015- Celamin continues to focus on recovery actions regarding the ongoing dispute with its joint venture partner, Tunisian Mining Services
- Legal action now focussing on an alternate dispute resolution process, following a review of the legal actions in Tunisian courts
- Shares remain suspended from trading on ASX
Phosphate exploration and development company Celamin Holdings NL (ASX: CNL) (Celamin, the Company) presents details of its activities for the Quarter ending 30 September 2015.
Celamin has been focused on the exploration and development of the Chaketma Phosphate Project in Tunisia. The Chaketma Project is a potential large scale phosphate development asset, which comprises six prospects over a total area of 56km2. It hosts a total JORC compliant Inferred Resource (as at March 2015) of 130Mt @ 20.5% P₂O₅, confirmed from drilling at only two of the project's six prospects.
Results from metallurgical test work conducted to date have confirmed the potential for the project to produce a saleable high‐grade phosphate concentrate. The project is also well positioned relative to major infrastructure requirements, such as rail, road and ports.
The Chaketma Phosphate Permit is held by Chaketma Phosphates SA ('CPSA'). CPSA is the operating company responsible for development of the Chaketma Project.
Celamin's wholly‐owned subsidiary, Celamin Limited, remains in dispute with its joint venture partner, Tunisian Mining Services ('TMS'), regarding ownership and control of CPSA and is working actively with its legal advisers to resolve this situation.
During the September Quarter, Celamin undertook a review of its legal actions to‐date. The review, by an international law firm, was initiated by Celamin in response to the slow and unsatisfactory progress of the various Celamin legal actions taken before the Tunisian Courts.
The outcome of the review has resulted in Celamin deciding to pursue an alternate dispute resolution process, according to its contractual rights. As a result, during the Quarter, Celamin delivered a formal notice of dispute to TMS to initiate negotiations, in order to protect its interest in the Chaketma Project and advance its claims.
Celamin has accordingly withdrawn its application in the Tunisian Courts for reversal of the share transfer, in order to proceed with this alternative approach. The withdrawal of this action is without prejudice to Celamin's rights to re‐initiate such proceedings or pursue recovery of its interest in CPSA through alternate dispute resolution.
On the basis of strong documentary evidence, Celamin disputes the existence of any default on the part of Celamin Limited and considers that there has been a wrongful and ineffective transfer and purported expropriation of Celamin Limited's shares in CPSA. Celamin remains committed to pursuing return of its interest in CPSA and the Chaketma Project and believes early resolution of this dispute is in the best interests of all parties and Tunisia and its people. The Chaketma Phosphate Project is a world class asset and Celamin believes it is best placed to manage the Project to ensure that it proceeds to development.
Celamin is continuing with the other legal actions in Tunisia including the criminal proceedings and the debt recovery action previously announced. Celamin is also awaiting formal delivery of the judgment from the Tunisian Court on its interim application for escrow of Celamin's shares in CPSA and will consider pursuing this matter further once the judgment is delivered
Celamin has been the sole funder of the Chaketma Phosphate Project providing US$8.6M of funding to December 2014. Celamin's partner, TMS, has been beneficiary of 50% of this project expenditure, as the largest service provider, using equipment purchased with loans from Celamin.
On 21 October 2014, the Director General of CPSA, without seeking the required approval from the CPSA Board, made a US$3.3M cash call directed to Celamin Limited for funding of the Chaketma feasibility study. CPSA already held an excess of funds above requirements at that time, and, in Celamin Limited's view, no cash call was justified.
Celamin Limited objected to this cash call and, after negotiations, TMS and Celamin Limited entered into an agreement dated 10 December 2014 to reduce the cash call to US$2M and extend the due date for payment until 15 January 2015, in the expectation of agreement being reached in the first quarter of 2015 on the choice of engineering contractor and the terms of their engagement for conducting the feasibility study for the Chaketma Phosphate Project.
Celamin deposited US$2M into CPSA's Tunisian bank account on behalf of Celamin Limited in payment of the cash call, receipt of which was confirmed by both CPSA's bank and the Director General of CPSA on 13 January 2015.
On 19 January 2015 the Director General issued a notice of default to Celamin Limited for failure to pay the US$2M cash call by the due date ('alleged default'), rejecting payment by Celamin on Celamin Limited's behalf despite this payment meeting Tunisian legal requirements and having been
made in exactly the same manner as one of the two previous cash calls. Celamin Limited objected to the default notice and the action by the Director General and called a Board meeting scheduled for 9 March 2015 for the purpose of reversing these actions. Due to subsequent events this Board meeting was not held.
Within 24 hours after receipt of the default notice, TMS indicated that it would not be acting on that notice and the Director General and TMS continued working collaboratively with Celamin in progressing the Chaketma Phosphate Project.
On 3 March 2015 the Company was advised by the then Chairman of CPSA, Mr David Regan, that he had received notice from the Director General of CPSA to the effect that Celamin Limited's shares in CPSA had been transferred to TMS on 13 February 2015. Celamin requested a voluntary trading halt on its shares from trading on ASX on 4 March 2015. The shares remain suspended from trading on ASX.
Following initial legal investigations, the Company understands that the Director General (without Celamin's knowledge and without any authority from the CPSA Board) has purported to transfer Celamin Limited's shares to TMS on the basis of the alleged default.
The Company disputes the existence of any default on the part of Celamin Limited and asserts that Celamin Limited's shares in CPSA have been transferred without any legal basis.
The US$2M deposited by Celamin for the cash call, which remained in a Tunisian bank account in CPSA's name for a period of over three months, was received back into Celamin's bank account in Australia on 27 April 2015, transferred from the Tunisian bank of CPSA at the instigation of the DG of CPSA after having declared the 'default'. Celamin received no communications from TMS or CPSA in relation to the transferred funds.
Previous cash calls totalling US$1.7m were provided as loan funds from Celamin Limited to CPSA prior to 31 December 2014, for the purpose of funding the Chaketma Phosphate Project feasibility study. As at 31 January 2015 US$1.4m of these loan funds remained in CPSA's Tunisian bank account. Celamin understands the loan funds can be recalled from CPSA regardless of the outcome of the legal dispute.
ENDS
For further information or enquiries, please contact:Managing Director Corporate Relations
Celamin Holdings NL. Celamin Holdings NL
T: +61 (0)3 9692 7222 T: +61 (0)3 9692 7222
E: nic.clift@celamin.com E: stephen.nossal@celamin.com
Mining Tenement | Location | Beneficial Percentage held | Interest acquired/farm‐in during the quarter | Interest Disposed/farm‐ out during the quarter |
Chaketma | Tunisia | ‐ %* | - * (see below) |
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