The AGM was attended by about 6 -7 suits/Brokers and perhaps 1...

The AGM was attended by about 6 -7 suits/Brokers and perhaps 1 or maybe 2 independent shareholders (there was a guy there apart from me who did not appear to be a Broker).

Colin Steyn chaired the meeting and the formal part/resolutions progressed swiftly. All resolutions were passed and given the proxy votes the show of hands/vote was a formality only.

After the voting question time came up.

The obvious question was our share price and its drop. There were all the obvious reasons given including:

A degree of uncertainty regarding getting the finance approved

No production still to develop the resource

Negative cash flow

Coal out of favour

Heavy shorting of the stock

To a certain extent this was no surprise.

Gill Winckler was present via phone as a conference call/extension speakers and she added some comments but the call quality and to a lesser extent her accent was such that I missed most of what she was trying to say.

A suit asked about what happens if the finance is not approved at the next EGM. The response was that they are confident that the existing Borrowdale loan facility could be extended and increased and while not enabling project completion it would certainly give them time and opportunity to explore other options.

Asked if the major shareholders in support of the EIG they indicated that all major shareholders support it.

Asked if this support then made it a virtual guaranteed approval at the EGM, it was indicated that they needed shareholder approval and I got the impression that Borrowdale themselves could not force this across the line - I am unsure as to if this was due to voting exclusion of just numbers.

I was surprised about the lack of questions from the suits but they did seem to want to talk one on one with the Directors – perhaps not to alert their competing brokers to their questions and CPL’s answers (I have seen this at other meetings).

After the meeting the management/board met with the shareholders/brokers and discussed things more.

I spoke for quite some time with Colin and asked a few other questions.

I asked why Borrowdale were not buying on market given their claimed support and the current price – I was told that they would like to and are prevented by their current level of shareholdings with any increase would initiate a compulsory takeover offer that they do not wish to initiate.

Colin assured me that Borrowdales and other shareholders interests are in common and that while initially a short term resale of the undeveloped project was attractive the absence of a suitable buyer has resulted in Borrowdale supporting development to production.

If a buyer comes up with a suitable offer pre full scale production then they would consider it and I indicated that given Borrowdales cost of shares that this offer would have to be north of $2.00? Colin indicated that they are interested in multiple returns not percentage returns and this inferred that they would certainly block any offer below $2.00 and would be seeking something north of $3.00 plus. They are patient and will develop the resource if no offer is forthcoming.

Colin also mentioned his frustration with unsubstantiated claims that Canadian approval would not be granted, he indicated that neither approval/non approval had taken place and that nothing should be read into this. It is a process that needs to take place and all indications are that it will be approved.

He also indicated that there will be some additional announcements pre the EGM to outline and clarify CPL’s path forward.


Overall I left the meeting comfortable with the management/direction/company but not the share price.

I am of the opinion:

We have a finance offer that will almost certainly be approved.

Mining will almost certainly be approved.

This finance allows us to just about get to Stage 1 (we maybe 50 million short but nobody is going to let the company founder after putting so much in so this slight shortfall I don’t consider to be a significant problem).

After Stage 1 we are just about self funding.

Borrowdale will both support the company and block any crap hostile takeover offers.

The shorting and relentless selling will eventually stop and share price growth will return.

The share price is being heavily manipulated influenced by the big end of town to the detriment of the retail investors.


The the above is my assessment of the current situation and the AGM. I have been buying and will continue to buy as I believe that CPL has the best potential return over the next 24 months or so of the 20 or so stocks that I try to follow.


Newbie Thomas