Ann: Legal Proceedings , page-10

I'm not sure about this being an easy case to win, but it certainly appeared that Justice Goldberg was by tone of voice more disposed to treat the matter as a simple proposition that could be dealt with in minutes. He quoted the Hebrew saying of Passover, "Why is this day any different from another?"

His point is that this was as good a time to deal with the matter as any.

Counsel for the current Board said that he needed time to research the matter as there could be discretions available for the judge to use to ignore the written intention on the form.

But he may have made a mistake when saying "so what" if this statement was on the form. He will take the line that it is an obvious mistake, but when suggesting that Golderg J raised an eyebrow and tempted Mr McGee to pursue that suggestion further. McGee floundered for a moment saying that he was unprepared and had another case at two that afternoon so in the interests of procedureal fairness Goldberg relented and set down the hearing for Friday 17th.

Long suffering JRV shareholders shouldn't get too excited yet, but our barrister, David Denton was quietly pleased that the case will be heard so quickly.

This was the same judge who suggested that there was a case for investigation in his written judgement and said that my (ie our) complaints about the admininstration of the company were in no way specious or frivolous. ie he was clearly saying that at first sight at least something may be wrong about the transactions Jervois entered into during the election period.

I must say from a company analyst's perpspective there are some strange inconsistences or perhaps lack of commercial reality about all three transactions -Goldpride, Bunnawarra and the increase of Jervois's uranium holdings.

Clearly the fact that relatives of the new Jervois director Derek Foster were directors of Goldpride until March 4 of this year does raise some issues as only two weeks later the company and sold to Jervois.

Mr Foster was not a director of Goldpride when it was sold to geologists Peter Peebles and Shane Fitch as he (Foster) ceased to be a director from January 2007, but as he had been a director for fourteen years prior to that the implication could be drawn that this was a family compan and that in practical sense Mr Foster was still influential in its decisions. That may be unwarranted implcation of course, but judges use common sense every day in testing be veracity and reality of written and oral evidence before them. It would certainly be diffcult for someone to assert that Mr Foster had absolutely nothing to do with the sale at all as Mr Pursell himself said at the EGM that he had been negotiating with Goldrpride and New Age "long before" the EGM was called.

It is a matter of public record that Mr Foster has had a long association with Jervois as a consultant geologist so another any explanation would need to be very convincing.

Similarly Peter Peebles has had commercial associations with New Age which of course doesn't mean a great deal by itself. The Australian mining world tends to be criss-crossed with associations and links, but it is relatively unusual for leases to be on-sold in just two weeks and by a consultant used by an associate company of Jervois. New Age and Jervois shared uranium leases until New Age sold them across to Jervois.

These collective transactions could of course be all entirely above board. Interest in uranium prospects is very weak at present, but shouldn't a Board take the long view and acquire cheap assets while they remain cheap? This is called "Buying straw hats in winter."

But what is very puzzling from a commercial perspective is how Jervois makes money from them. The Board has suggested it will float these leases in an new IPO at some point which sounds a reasonable suggestion until we examine the state of the market, availability of IPO capital, the quality of the leases and the company's expertise in uranium exploration. None of this is insurmountable of course. You can buy in expertise etc etc, but to prepare leases for an IPO requires a minimum amount of drilling with some attractive results to offer the market.

This will be difficult. One instance suggests the difficulty. Uranium SA is a small company based in Adelaide which has discovered what is in effect a new uranium province on the Eyre Peninsula. It has management with uranium exploration and extraction expertise (in-ground leaching) and it has large tracts of round in a recognised uranium zone to the west of Olympic Dam. It has very good contacts with China's nuclear authorities and with director Xu Gang has someone on the Board who worked with the sole authority that purchased all Chinese uranium.

The fact is that despite this focus, expertise, its prospective ground and actual drilling results plus its very good contacts, the market shows almost no interest in Uranium SA.

The Board's apparent suggestion is that "Jervois Uranium" can find the money to drill the leases in a market crowded with uranium hopefuls who are already down the road with actual discoveries.

This is not intended as a sneer, but a practical question from someone who has experienced the fickleness of markets of over decades.

Similarly the molybdenum acquisition seems daunting. New Age did some preliminary work with augur drilling. This indicated anomalous values for "moly" over a 3-4 km strike length. That's sounds interesting certainly. There could be a major molybdenum structure there but it will take at least $2-3m to produce partial proof that there is something of interest and then perhaps $10-15 to turn that into a project which could attract funding partners.

Again there are dozens of parallels. Monax, another SA company, has identified a large manganese structure north of Port Augusta. It outcrops and is not deep under surface cover. Is anyone interested? Not at the moment.

Meanwhile Jervois has to hold on to Young, presumably contine to work on Nyngan and also spend money exploring for diamonds. That's a very full plate.