So, I had a bit of time this morning and decided to have a look...

So, I had a bit of time this morning and decided to have a look at the Charger Metals (ASX: CHR) IPO, to see if there were any shenanigans similar to what went on with the BEM IPO.

The basic's of CHR is that it has been created after entering into 4 project acquisition/JV agreements late last year (3 of which were with LIT, 1 of which was with Mercator Metals). On face value, for the 3 LIT projects it seems like LIT holders have come out of it OK. They own 19% of the new company (CHR), they hold onto approx 30% ownership of the projects, and there are some future incentive type payments. Seems generally OK.

The part that peaked my interest was that when I looked at the Top 20 to see the LIT ownership %, there was another familiar name on there. In number 3, at 5.06% ownership is no other than .............................. Adrian Griffin.

My first thoughts were that it was another BEM situation, but looking into it further, there is at least a bit more of a papertrail to this one.

The 4th project that CHR acquired/JV'ed last year was owned by a company called Mercator Metals. This is a privately owned company and the MD is no other than .......................... Adrian Griffin. According to the IPO Prospectus, "Adrian Griffin is the controller of Mercator Metals Pty Ltd. The Company has been advised that Mercator Metals Pty Ltd intends to assign its 15% interest in R70/59 to Adrian Griffin upon Charger acquiring an 85% interest in R70/59." Based on this comment, I suggest that Mercator Metals is owned by AG.

The other thing that is interesting about this Mercator Metals project is that it is right next door to the LIT project. So, prior to the aquisition/JV agreements the whole "Coates/Coates North Zone" is made up of -
- 2 tenements that were owned by LIT,
- 2 tenements that were owned by LIT/CHR pre-existing JV,
- 1 tenement that was owned by Mercator Metals.

For the 4th project, Mercator Metals (AG) received a $15,000 option fee, 2,550,000 CHR shares, 1,000,000 CHR options and future incentive type payments. Based on a 0.20c IPO share price, that values AG's shares at $510,000.

This explains why AG is the 3rd largest share holder in CHR.

So, as I have said before, I was a shareholder of LIT, but I am not anymore. I sold out about 2 years ago after seeing too many questionable activities from LIT. But if I was still a shareholder, some of the questions I would be asking would be -
- What is the history of the Coates project from an LIT perspective? How did it come to pass that LIT purchased 2 tenements, and the MD of LIT happen to own the tenement next door?
- Was there anything legally wrong with the dealings between CHR, LIT and Mercador Metals? My view is that there probably isn't anything legal wrong with what has taken place.
- As part of the negotiation between LIT and CHR, was the MD of LIT acting in the best interest of LIT shareholders considering you would think there was a dependency between the sale of the LIT owned Coates tenement, and the Mercador Metals owned Coates tenements. My view is that it is very questionable.
- Does it pass the pub test? My view, based on this and previous actions by LIT management, there is no way this passes the pub test.

Will leave everyone to come to their own conclusions.