cash could be clue to making a move on indago

Source: The Australian Financial Review newspaper [Page 44]
Date: Tuesday 23rd June, 2009

Cash could be the clue to making a move on Indago

Goldlink Incomeplus duo Peter Pynes and Tim Kestell clearly love a scrap.

Fresh from wrapping up control of the former gold investment fund, albeit in a more diminished state, Kestell and Pynes are using the company for their next move - a tilt at board control of Indago Resources.

They've already amassed a 12 per cent stake in Indago, including a few million shares held by Kestell's private company Desertfox, and are taking the unusual route of a proportional bid to take their holding up just 8 per cent to 20 per cent.

Followers of the Perth pair would have noticed parallels in the approach at Indago - the old Western Metals - with that used at Goldlink. A proportional bid for a cash-rich company and a shareholder meeting to install themselves on the board.

It took a long time to bear fruit and strained their resources at Goldlink, but succeeded.

They put shareholders through no fewer than six meetings in the space of 12 months to resolve the issue of control and only won after agreeing to hand back all but $5 million of the $28 million in cash.

The appeal of Indago is less clear - except for the cash.

They've caught the company in the middle of a shift from exploring for uranium in Tanzania to one looking for gold there, having bought the promising Nyanzaga project from Sub-Sahara Resources.

Indago has also just completed a 10-for-1 share consolidation, leaving a lot of unmarketable parcels of shares in the hands of Investors who might just like the opportunity to offload.

While a notice has been lodged to call a meeting to depose incumbents George Bauk, John Fitzgerald and Geoffrey Chapman, no date has been set. No doubt those directors will be doing all they can in the meantime to shore up the defences and brace for the board onslaught.

At least Goldlink will be able to argue it will be careful with Indago's $17 million cash pile. Its initial stake includes an option to buy shares, plus the shares owned by Kestell, and it is using its own scrip to bid for the other 8 per cent.


Ends.

Cheers, Pie :)