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Letter from Dr Chris Giles (Post #: 40267427 )
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Response from a Fellow Shareholder
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Dear Fellow Shareholder
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Dear Chris,
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I apologise for the delay in communicating with you.
Regrettably, for legal and other reasons it has not been possible for me to share why I consider the proposed SIMEC/GFG transaction (Transaction) is not fair.
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I agree with boddanturniboy who said “It seems to me that SIMEC/ GFG know it has a very good deal (for them) and are utilising absolutely every legal and PR avenue available to them to ensure the vote is FOR.”
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I spent some time preparing a shareholders letter that was vetted for release by the independent directors. However, GFG, who were required to be consulted under the terms of the share subscription agreement, objected and threatened legal action if this letter was released. GFG lawyers have subsequently written to me personally questioning my stance in declining to make a recommendation after receiving the independent expert’s report with its not fair but reasonable conclusion.
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(a) The fact that GFG needed to be consulted was not previously disclosed to shareholders.
(b)You fight for what is right, you fight for your beliefs.
(c) My question is: what other information has been suppressed from shareholders under this term in the SSA?
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My purpose in writing the shareholders letter was to highlight mostly technical points that I considered you should be aware of in order to make an informed decision. I wanted to outline the material effect that improved metallurgical recoveries and recent moves in commodity prices would have on the mining economics and potential value of Kalkaroo. I also planned to mention my views on the exploration upside on our tenements and the significance of the Grants Basin discovery.
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I believe existing shareholders should see those technical points:
- mining economics and potential value of Kalkaroo;
- exploration upside on our tenements; and
- the significance of the Grants Basin discovery.
Particularly given you are Havilah’s Technical Director.
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Much of the promotional information released by Havilah to date relating to the Transaction has come from the CEO, the independent directors, PR consultants, legal advisors and others, not one of whom has any technical expertise. In my opinion shareholders cannot be properly informed unless a balanced view of the technical aspects is also presented, which was my intention.
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My opinion is that a balanced view of this transaction has not been provided to shareholders to date.
Are you saying the technical aspects in the promotional information has been juiced?
For me, the advantages for the Company do not outweigh the risks for existing shareholders.
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From the start I have supported the concept of an arrangement with SIMEC/GFG on our iron ore projects as it makes good sense. However, this has always been on the proviso that any such arrangement must be fair for Havilah shareholders first and foremost.
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If SIMEC/GFG really wants Havilah’s iron ore, it needs to pay a 'fair price' particularly if it wants a long-life supply of high grade and low impurity Fe concentrate.
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The independent expert report considered that the Transaction was reasonable in part because there were no other alternatives. Havilah has survived for 20 years during which time it has discovered a valuable and unique minerals portfolio. I am confident that Havilah can prosper in the future with support from a unified shareholder base and competent technical leadership.
You have my commitment that if I am around after the vote on the 12 September I will continue to work tirelessly in your interests in realising the substantial latent upside value in Havilah.
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(a) There are many more appropriate alternatives used in the minerals industry, including a joint venture partner farm-in or 100% sale, possibly with a royalty component.
(b) I noticed that your consultancy agreement expired during July 2019. Has it been renewed by Havilah?
We also need you to stay on the Board as a Director. Remember, the other Directors cannot fire you as a Director. They can certainly request your resignation. DO NOT give it to them.
The only way they can legally remove you off the Board is by calling a general meeting of shareholders and putting that as a resolution.
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For the record, you should be aware that I had no part in the move by the independent directors to deny Dr Bob Johnson and certain other shareholders the right to vote at the EGM. I was not consulted and had no idea that an application had been made to the Takeovers Panel by the independent directors until after the event.
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The true colours of the players have been shown.
Who are your friends and who are your ‘detractors’?
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I trust that you will read and carefully consider the Notice of Meeting and the materials provided by Havilah and vote according to what you feel is best for you as a shareholder. I am very sorry that I cannot say more about the technical aspects to better inform your decision as I had hoped.
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After reading the EGM Notice of Meeting and IER, I voted AGAINST the EGM Resolution.
Stay strong.
You have your integrity and credibility.
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I have not been provided with Havilah's share register with email addresses. Therefore this note will only be received by a few shareholders whose email address I happen to have from previous contact.
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I hope you were able to get it out to all the Mum and Dad shareholders who invested in Havilah because of you.
As a long-term shareholder, I invested over the years because of my faith in you. So you saying you could not recommend this deal spoke volumes. It was a disgrace that it was buried away on page 23 of the EGM Notice of Meeting.
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Please feel free to email me if you have any questions and leave your phone number if you would like me to call you back.
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During AGMs, you always talked about writing a book on Havilah one day.
Please do not let this be the last chapter of that book.
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Best wishes and warm regards
Chris Giles,
Havilah founder, fellow shareholder and exploration geologist
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Kind regards
A fellow long-term shareholder
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(20min delay)