This letter is very defensive and in my view disingenuous, blaming, and deflective. My view is this whole situation is occurring because it appears:
1. They have not been transparent
2. They have conflicted their interests with that of shareholders
3. There are truths in what has been going around, and this letter seeks to twist the narrative
4. The Board and Executive are not taking responsibility and accountability
5. Not managing finance prudently and carefully when the coffers were full (complacency)
Remuneration
Fact - Darryl was on the Board in Dec 2023 when the Board made the decision to do the destructive capital raise
Fact - Darryl was running for CEO at this time (CEO recruitment had been going on for four months)
Fact - The Dec 2023 raise collapsed the share price from over 20c to under 20c
Fact - Darryl performance shares were pegged at 20c or the 5 day VWAP in Dec 2023 (whichever higher) in the remuneration negotiation
Fact - The July 2024 raise collapsed the share price from over 20c to under 20c
Fact - Darryl was managing the company for 6 months prior to his CEO appointment in Feb 2024 (from ~ August 2023 to January 2024)
Fact - In the September 2023 quarter during a time when Darryl was in the company managing it (and on the Board), the company spent $53M
Fact - In the December 2023 quarter during a time when Darryl was in the company managing it (and on the Board), the company spent $26M
Fact - By December money was so short due to having spent it all (and having not achieved timelines) they needed to do the raise which saw the share price go below 20c. They were recruiting for the CEO at this time. Darryl was on the Board, was managing the company, and became the CEO.
Final equity raise and current shareholder dilution
"shareholder ownership dilution is different to shareholder value dilution"
Fact - diluting shareholders ownership at low prices does dilute their future value. His statement is misleading. If I dilute your ownership in a house for a cheap price, and then the house value goes up, you make less money. It is that simple. The cheaper I dilute it for, the more I dilute your value. Ironically it appears that in this instance, the cheaper ARU was diluted for, the more performance shares it ensured the CEO received.
Short Selling
Fact - Blind Freddy can see the 10s of millions of shorts covered after both capital raises. It is disingenuous the way it has been framed in the letter to try and obfuscate and minimise the matter with language like 'possibly' 'minimal' and 'allocate....those with long-term mandates'. The bulk of the shares went to short sellers. This is data not speculation. One only needs to look at shortman and no doubt the company and their advisors have better access to this data than we do.
Use of funds to date
"reduce the Project’s critical path in the order of nine months"
Fact - the schedule increased by 10 months. Spending of this money was supposed to decrease schedule
Fact - the capex increased by millions whilst they spent millions of capex allocated funds. How?
Fact - whilst the schedule increased and the budget was poorly managed, Management got performance incentive shares awarded
These are not "conspiracy theories". They are facts. Inconvenient ones perhaps, but facts nonetheless.
It is right to question management at any time, but especially when things don't stack up and interesting how it is being shut down. They have their own interests which are not the same as yours.
A lot of this could have easily been resolved by doing things differently, e.g.
- the CEO performance shares be based on a number of shares, not a fixed doillar value of shares. Or better yet Options at 5 different Option prices over the 5 different performance milestones.
- the cap raises being done at a time where there wasn't a conflict
- the cap raises being done when share prices where higher (could have thrown a dart to a dart board blindfolded and picked a better time and price)
- the budget being better managed, and the CFO not being awarded performance shares when it is evident budget was not managed well and ran out
- not conflicting roles of Board and Management and Candidate all happening at the same time
- not shutting down when management are questioned
The company should realise if things have gotten to this, something has gone wrong. Shareholders have lost value now and in the future. It is deflecting and improper to imply certain evil shareholders are running around with misleading conspiracy theories because they are being rightly questioned on their performance.
I'm sure shareholders would rather be proudly congratulating the performance of the coompany and management, but they are not.
I'm sure shareholders would prefer not be thinking or worrying about these things, however the fact is the company has given them cause to do so.
(20min delay)