wim 150 win / win ?, page-18

This whole episode, of the attempted sale of Exploration Licence 4521, leaves me feeling uneasy. It has been a messy, costly, time wasting foul up.

In the beginning it started so well.
Dec 2000 - APG & Ticor jointly granted EL4521 (includes the WIM150 deposit).
Aug 2002 - Ticor withdraws.

Nov 2002 - Newcrest JV starts 100 hole drilling program on EL4521 to search for gold & copper. Newcrest to fund all operations through to a decision to mine, APG will then hold a 10% contributing interest.
Aug 2003 - Newcrest withdraws from JV.

Feb 2004 - farm in agreement on WIM150 deposit with Australian Zircon ?AZC (formerly Southern Titanium NL.) ? who earn 80% by completing a bankable feasible study. APG may maintain a 20% working interest or convert to a 10% net profit interest.

Mar 2010 - APG agrees to sell EL4521 (including WIM150) to Astron Limited for $5.0m to accelerate development of the Newcastle Iron Recovery Plant.
May2010 - AZC commences legal proceedings to stop sale.
Aug 2011 - AZC litigation successful. APG cannot sell EL4521.

APG originally gained control of the resource with lots of potential at a bargain price.
Great work by Mike Smith ? APGs Exploration Manager.
APG then gets other companies to fund the exploration required under the Exploration Licence. This is a good strategy, as it takes the pressure off APG?s cashflow.

However, the 2004 farm in agreement with Australian Zircon does not seem beneficial to APG shareholders. I don?t know if the farm in agreement has a completion date, but AZC does not seem in any hurry to complete their bankable feasibility study . It has already taken 7.5 years with no end in sight.
And in view of APGs ongoing cashflow problems :
HOW COULD THE APG BOARD EVER SIGN A FARM IN AGREEMENT THAT DID NOT GIVE THEM THE IRONCLAD RIGHT TO SELL THEIR OWN ASSETT.

If the EL4521 sale to Astron Limited for $5.0m had gone ahead in March 2010, this is where we should be today:
- APG would not have issued an extra 120 million shares at 3.5c to raise $4.2m
- APG would still have a deal with Kronos, but MT would have been in a much better negotiating position to drive a better deal.
- Newcastle Iron Recovery Plant would be producing cashflow by now.


Now it seems that APG cannot sell EL4521 without AZC consent.
So while APG may own the exploration licence, it is actually now AZC that controls any sale.
That AZC should choose to allow APG to sell EL4521 at a time or price decided by APG should not be taken for granted.

I have no idea how the EL4521 asset will be resolved eventually, but I can?t help feeling APG has lost a golden opportunity and shareholders are already the losers.