Both @ozblue and @Scarpa offer important points to query. I...

Both @ozblue and @Scarpa offer important points to query. I acknowledge that but I think also they are incorrect or biased for whatever reason in some aspects and I think it’s right to question the administration with ASX by the company but I also think, the ASX is questionable and I’m surprised there is little effort applied to see how.

I’ve noted with the last recompliance update, on, January 22,the turn of phrase:

“The response received from ASX was almost identical to the one received in November 2018 and which the Company disclosed in its ASX Announcement dated 3 December 2018.”

Specifically, “almost identical” I find intriguing as the ASX has obviously accepted that observation as true enough. So what does it mean, if you consider that the company would disagree with the ASX in adequately addressing ASX concerns?

Bear in mind, WFE and it’s lawyers, have gleaned a partial answer to what they have been waiting on for an inordinate amount of time, clarification on its position with regards the acquisition.

“ These financial statements have been prepared by the Co hi mpany’s financial management and are pending sign off by the Company’s auditors, with one of the principal reasons for the delayed lodgement of the financial statements has been clarification over ASX’s position in respect to the Applications made by the Company in regards to the Acquisition.”

Basically as we have learned for example from a poster here who called ASX and got some feedback on the matter, ASX perceived the non-lodgment of financial statements as a concern for relisting yet ASX were not tethering that lodgment depending on “...clarification over ASX’s position...in regards to the Acquisition.”

The matter here seems to be including the Acquisition in the financial statements. And appears to be a critical matter for the company in a way I can not identify, however the ASX allowed WFE to convey this as a fact so it has to be true. It appears ASX has allowed an obtuse criticism be aired against its administering a decisive reply.

How long was WFE waiting on the ASX? How many people have asked this and or know the answer?

These questions answered are useful to observe how a response was had just 2-3 weeks before a new policy was published that takes aim at companies like WFE being suspended for a long time. I t a as if ASX wanted to orchestrate a reply once it had implemented a new policy that would reinforce the threat to WFE if it lodged the application.

But I want to stick to the main topic as above on “almost identical” because that response from the ASX does not fit with the companies perception of its progress and viewpoint.

So another question comes up that for example Ozblue raises on recompliance being straightforward, well if it is/was then ASX should not take long to reply to WFE on recompliance. What’s so complex then? Again why I believe ASX delayed to implement its new published policy as a extra threat to companies suspended too long.

So where is ‘the space’ of taking so long if ASX knows it’s rules? Here’s why in summary:

Now I know Ozblue has insisted that ASX “concerns” were about the rules, but the company says “concerns” not ‘compliance with the rules’ in last update, which does open up and as I’ve stated just below next paragraph, there is space for developing internal policy on-the-fly for the ASX, so “concerns” is kind of soft territory more akin to internal position/policy making. Even governments gazette internal policies where the regulations are insufficient in detail. Anyone who sincerely doubts what I say should email ASX, as I have to take this view :

##So, actually “the rules”, and the guidance notes for Chapters 1 and 2 are not altogether in print for recompliance. This is because it depends on the activity of the company, the nature of the transaction, the scale of the transaction and any other unique factors involved in the transaction.##

As you can see, with “unique factors” there is scope for the ASX to make rules up as it goes. And hence I think there is scope for a kind of malice cloaked in policy where and when required.

Has the ASX addressed its own chapters for recompliance and noted where internal policy settings need to be developed in communications with WFE?

The fact that the company in the 22 Jan announcement could not convey its viewpoint on ASX’s position on concerns is possibly an artefact of the ASX and WFE not agreeing and not only that, ASX could not make WFE show how it fell short of recompliance because that would help WFE to recomply and perhaps allow space for legal action if ASX were just being obstinate for political purposes. In all likelihood the ASX just focused on its threats as suggestive of the letters being almost identical and yes DO NOTE, that’s all the company addressed was those absolute discretion threats that the company then decided to just change direction in shareholders best interests.

Shareholders should bear in mind that they are not beholden to ASX in a way that WFE is. It’s possible WFE’s position was weakened by administrative errors that complicate its claims against the ASX besides costs and time.

In the end ASIC should be stepping in to adjudicate where the ASX stalls and we have evidence of stalling so it’s clear it’s not clear whether there is recompliance or not as some want to make out as purely the Company’s fault, or, as above ASX was developing an extra absolute discretion trap being suspended too long.

Now for some aspects for relisting bearing in mind the discrepancy between “almost identical ASX letters and the companies view that it could adequately address concerns:

Offtakes;

the company says it “secured in-principle support for offtakes”. I’ve noted Ozblue ignores “secured”. In fact he is right to be sceptical and it’s easy to toy with such terms as a limp wristed handshake deal. On the other hand there is only so much one can achieve at a pre-acquisition level. My argument is and in-general, why not let ASIC have the final say which would be at the post acquisition stage and prospectus lodgement stage? Where a number of concerns could be addressed especially offtakes and the B license?

In the last announcement; the update on recompliance, I do not see the company stating the ASX does not see sufficient nor insufficient material evidence of support. In fact ASX allow “secured” to be inputted to condition the value of the in-principle support, but why not straightforward language of an offtake agreement?

Because these pending transactions can not be signed off on till ASX approval of the Acquisition, and secondly by the WFE shareholders.

I do not doubt Airguide’s capacity to organise offtake parties ready to sign once acquisition occurs. It is possible noting the cobalt price things have taken time. But many did see the face of an Airguide executive, Thomas Cheung, on Twitter whom I think was not on holiday in Perth but business perhaps to show and explain the content of a pending offtake, otherwise an email would suffice. I’m just assuming which might be too much for some here.

Also, you can have signed albeit conditional binding heads of agreement offtakes that lead to nothing. Just ask Wesfarmers on Mitsui offtake: it’s advisor valued when doing due diligence to acquire Kidman Resources, KDR. So I don’t see as a stumbling l unsigned off-take agreement at a pre-acquisition phase.

The stumbling block is the politics with the ASX that should naturally have given ASIC the chance to assess at the prospectus lodgement stage since there is ample proof of having secured customers pending acquisition.

Accounts;

31Jan 2019

“The Company awaits receipt of the accounts prepared in accordance with International Financial Reporting Standards” 31 Jan 2019

22 Jan 2020

B: “Financial Accounts - for which the Company can confirm that during 2019, it had prepared audited accounts for AHIC and Societe Luapula SARL, completed and signed off in accordance with International Financial Reporting Standards and which were submitted to ASX along with all associated corporate and shareholder documentation in its Applications;”

22 Jan 2020

https://www.asx.com.au/asxpdf/20200122/pdf/44dfvq6lcxv7pq.pdf

As the company is stating in last update that both letters from the ASX ( a year apart) are almost identical could it be they continue to see issue with the accounts not to International Financial Reporting Standards?

Because the company says it has complied with the IFRS accounts. So to say “almost identical [asx letters]” does not fit. So how can the November 2019 ASX letter be “almost identical” to its first letter a year before? ASX has accepted this “almost identical” but obviously they didn’t care for the accuracy which I argue makes them culpable for misconduct.

“Almost identical” would be , 90-98% of concerns being licenses, accounts and valuation. Therefore certainly not 60 or even 80%. Because, though “almost identical” doesn’t give much insight as a turn of phrase, ‘accounts’ would be a major matter, say 20-30% of concerns and that, as the company confirms and due to the ASX allowing the IFRS is done input, does not match the view there is “an almost identical” to last ASX letter.

So I sense here (speculatively but material as lawyers write these things), logically, a split in views between ASX and WFE. However the ASX allows WFE to announce that it has complied with the accounting standards required. So something is amiss there, could it be the ASX does not want to challenge on this input into the last update considering they have the trump card of absolute discretion? This supports my view ASX is acting on unfair grounds, and being vexatious.

B License ;

Basically, my view is, after a big hunch, the ASX is implicitly demanding that the Luapala facility owner currently hold the B license which means it has to be a plant being commissioned because the Congolese require that to process the license B. Is this a reasonable (implicit) expectation from the ASX when the plant has been on care & maintenance since 2016, and planned to undergo a partial conversion to accommodate cobalt hydroxide?

Considering once again the ASX response letters being stated as “almost identical”, then this B license to operate the facility is still an issue for the ASX... still————is everyone here starting to see / intuit the inconsistency between “almost identical [asx letters]” and the company’s position that AHIC is not required to and does not hold the license because it’s Congo subsidiary holds permits and licenses and, that the B license is a post-acquisition item, because it’s a license issued at a commissioning stage?

If ASX want to see the b-license as a requirement for relisting, then they also would be disallowing WFE to purchase this b-license because it is a post acquisition item.

Hence why the ASX focus on AHIC producing the B-license by the ASX as WFE are barred from acquiring it as WFE are at a DD phase of costs? WFE has stated, it is AHIC’s Congolese subsidiary that holds permits and licenses. So why is ASX asking for AHIC license? Is the ASX actually closely paying attention and with due care following the ins and outs of WFE’s matters? I would think NOT as the company has rebutted the ASX’s misfocus on AHIC, but also is implicitly contradicting the “almost identical” ASX reply letters, and, by the company stating their compliance with account standards, with “necessary” licenses and permits, and with independent valuations to industry standard, are ALL achieved, Further to that, waiting on the ASX for clarification on its position proved to be “almost identical” to the 2018 letter, again, why the wait if almost identical BECAUSE WFE has progressed and yet ASX ignores looking for a way out to not relist WFE with the acquisition is my presumption.

I sense an ASX playing a game with WFE because if the letters are almost identical and the company indicates it has addresed concerns adequately and ASX allows WFE to print that as fact then there is something seriously amiss, and I think it’s with the ASX as there are facts it can not controvert, unless it wants to be legally challenged. So, ASX uses the threat of absolute discretion to be legally passable. But I wonder for shareholders has it really acted appropriately and can be disciplined by ASIC at the very least if shareholders demand?

Independent evaluation ;

Firstly, WFE has stated that it conducted independent valuations to an applicable industry code standards. If not would ASX allow that kind of statement on complying to standards?

The value of the plant was written down to zero on AHIC’s side when in C&M and then subsequently to $30mil when WFE picked it up . I understand it was built for a cost of $80mil and then two years on ‘mothballed’. Where is the issue here in valuation?

———

Basically, offtakes and B license can only be demonstrated after the acquisition. There’s only so much evidence you can pile on at a pre-acquisition stage. And I see the ASX being wrong and vexatious on the B license matter.

When I read the phrase “almost identical”, and compare that to what the company says it has addressed adequately or completed, and ASX allows that to be printed then there is something seriously amiss and I think it’s the ASX that is amiss not just an administrative execution by the Company as issue —that’s petty and vexatious, because the two letters don’t match the ASX’s action to allow WFE to contradict that “Almost identical”

So, I’m wondering why shareholders are not looking to take legal action against ASX because what I see it’s clear the ASX is not cooperative and for unidentified reasons. It’s possible major shareholders have a different plan to legal action against ASX as this point. But major shareholders are still just a fraction of the registry.