Tomboys Creditors Meeting Report, page-60

Sent to VA & USNHs SOlicitor at 2.24pm WST

To:
Mirabella Ltd (Under Administration)
Mr Martin Jones, Ferrier Hodgson
Mr Robert Krechler, Ferrier Hodgson
And To :- Jeffrey Black, Counsel for BNYM (MBN Creditors Committee)

I personally attended the Creditors Meeting on 7 October 2015.


I have been elected to represent a large group of Australian shareholders in MBN.AX known as the mbn class action group with over 120 registered members and also the group known as the "Hot Copper MBN Rebels on hotcopper.com.au.

Our 2 groups hold some 7% of the ASX listed shares in MBN totalling on last count over 70,000,000 shares combined in MBN.AX valued at over AUS$7,000,000.00.

We hereby give you notice that we as a large group of unsecured creditors as shareholders in MBN.AX have agreed to and are formulating with the assistance of our solicitors & advisors a class action against MBN, and each of the current and former directors, Mr Mundin CFO, Ms Maryse Bellanger CEO, the company secretary Pr Linda Tompkins, and its professional indemnity insurers a number of claims and actions as follows:-

1. breach of ASX Listing Rules & ASIC Corporations Law duties including continuous disclosure obligations, material non-disclosure to the ASX investing public,
2. breach of their common law & statutory directors duties of care including not to cause economic loss to shareholders, to disclose material information affecting the trading of the securities on the ASX
3. potential WA Supreme Court or Federal Court proceedings
4. misleading and deceptive conduct contrary to the Trade Practices Act & Fair Trading Act
4. complaints to ASIC & ASX & Bovespa (BSX) seeking banning orders against all the involved participants.

We implore the Administrator & the elected US led Creditors Committee acting for the former bondholders who have rights under the Convertible Note facility to allow a fair and reasonable settlement by a recapitalisation using the US$30M previously offered to the company and to discharge the Convertible Note facility by fresh debt or equity and to relist the company on the ASX post haste to avoid mounting losses of our members.

Our members were incorrectly advised by MBN at and its officers in written and oral statements issued to the ASX and also at 3 conference calls in February, May & August 2015 and further at the AGM on May 2015 that:-
- MBN was a safe & stable with prudent financial management
- there would be US$100M cash at bank by 31 December 2015 (stated by CFO Mundin in May 2015)
- the annual capex budget was $23M-$33Mpa not $30M in 6 months
- there was a 4 year mine plan implemented in 2015 with a streamiling of COP & "optimising near term cashflows"
- the COP was well below the sales NP whose drop was being buffered by the drop in the BRL exchange rate
- that 2015 sales offtake income was "fully committed" [to 31 December 2015]
- that production was rising to 20,000T ni Concentrate by January 2016 (CEO x 3)
- That if "the need arises we have arrangements to get funding" (CFO Mundin March conf call)
- MBN was profit producing in Q1 Q2 & Q3 and expected profitable production all through 2015
- that the COP dropped to $4.49uslb in Q2 with a BRL rate average of 3.07
- that the COP thereby on their figures would be at ~3.40uslb at a BRL rate of now 3.90 well above the NP.
- there was no announced or disclosed change to any of these statements or announcements to the ASX investing public
- that MBN expected and had positive free cashflow from operations since January 2015 to now

No officer ever advised the ASX or the Australian investing public that:-
- $16M cash at bank as at 30 June 2016 would be mostly spent on unnaounced unbudgeted capex
- the cash at bank would reduce to $6M now rather than increase to $100M by 31 December
- there was a serious problem with 2015 sales income and deliveries
- that management would irresponsibly spend large sums of available cash on unbudgeted capex
- that there was financing of US$30M being negotiated since May 2015
- that MB was insolvent or short of cash
- that a CR could not cover any temporary shortage of cash.

As most of our members invested in MBN.AX on the basis of these announcements and statements and many re-invested having already had a 98.5% haircut from he 2014 DOCA, they solely relied on these statements and now face the loss of their investments at an average around 10c-14c per share post DOCA.

If the company was insolvent it ought never have to have been relisted on the ASX in 2014 or in February 2015.

It seems to us that the dispute between US creditors and US shareholders over the terms of this US$30M financing or CR are the primary cause of this administration and not profitable production at a current 30% profit margin with US$80M cashflows pa.

In the event that MBN is liquidated causing our members further loss and damage, we will have no alternative than to proceed with these class actions and seek legal relief & banning orders with ASIC ASX investigations as indicated above.

To indicate that this is no bluff, we advise that our current solicitors are XXXX and have over 15 years post admission experience including major Supreme Court litigation, test case actions and that my best man is XXXXX a partner of Freehill Hollingdale & Page who conducted the Bell Resources litigation in the WA Supreme Court on behalf of the bank conglomerate and my former clients brother is Mr Hugh McLernon a director of IMF Litigation funders listed on the ASX.

We as a group of Australian shareholders implore you both to allow this highly profitable mine to continue and come to amicable terms and relist this company on the ASX so that no shareholder or creditor loses their capital and this descends into the abyss of litigation and mine shutdown.

Our contact details are at this email address or to :-
MBN Class Action Group
PO Box 298
LEEDERVILLE WA 6903
[email protected]


Yours Faithfully
The MBN Class action Group