So this morning we commenced with Donaldson finishing his closing statement, I thought this was complete yesterday but obviously not.
He referred to an email from Miss Higgins (KDR sec???) in which she had a concern with the definition of pegmatitic minerals. It appears upon further review Marindi had included more minerals in the draft agreement which was different to the statement of claim. Also an internal Marindi document surfaced from Mr. Robinson which also stated different minerals. This was all in relation to what minerals each party would have the rights too.
There was again mention of the tenements and there being 8 of them that were subject to a JV with Kidman and others which would need to be unwound or sorted out and hence how could an agreement be in place on 4
th April 2016 when the JV’s had not been sorted.
More discussion was had around the tenement listings in any document or the lack there of so how is it possible to validate what tenements where in question.
On 6
th April 2016 Robinson (MZN) sent Eaton (MZN Original lawyer) an email saying 2you draft the HoA and I will get cracking on the tenement searches” (to identify the tenements) this was 2 days after the supposed agreement with KDR. The tenements only became fully known to Marindi on 7
th April 2016.
In Robinsons witness statement only 55 tenements were listed and in fact there was 59 with 1 expired.
Between MZN and KDR there had been 5 emails and 3 SMS in which MD had said
“We would sell the Li rights”
Donaldson exclaimed “But to What” (which ground/area)
Judge responded “Oh Yes” (to what)
Donaldson then went on to give ‘context’ around the claims, again terms and definitions were discussed and argued.
On 22
nd Mar 16 JT emailed MD with an attached letter and the letter was to later become a HoA.
Donaldson argued that there was no letter of agreement because there was an issue with the content that was discussed in the future and hence can’t be argued as it being the first agreement.
After the 4
th April (supposed agreement date), JT mentioned to Robinson (via email I think.
‘Kidman have the Forrestania Gold and it is our challenge for them to make a deal with Marindi so they don’t flirt (with others). They are sellers’
Again Donaldson said there had been no email contact between the two companies regarding a deal between the 13
th April and 13
th May when JT & MD had lunch in Melbourne. JT mentioned Marindi were still looking for a good base metals play. The communication between the two is said to have been friendly and none acrimonious.
In June 2016 JT contacted MD regarding the KDR ASX Release regarding Spectacular Grades and said ‘congratulations on a nice release and market response’. My guys are ready to meet any time you want to talk.
There was further communication in June after MD had personal news and JT said ‘ Re: Li, anything to talk about or should we push on on our own?’
In July after another chat JT said to MD ‘ I will leave it until you are ready to talk’
In August there was yet another lunch at the Palace Hotel in Kalgoorlie which was quite convivial and the discussed other proposals, possible JV I believe. It was at this point apparent to Marindi the supposed deal had gone as they didn’t discuss the deal for MH.
In October 2016, JT, Ashton & Robinson were in communication discussing their Forrestania tenements and future drilling. It was mentioned ‘At present Kidman have a world class deposit on our doorstep, let’s hope they continue to push out good results for the next 3 (or few) months’.
Donaldson stated that it was at this point that Ashton hatch a plan to shame Kidmans and contacted a reporter from the AFR to run a story. The reporter was not interested and said they only dealt in ASX release related news.
It was at this point I looked at the MZN BoDs and felt like they had all of a sudden become the defendant or had a case to answer, please note this was my feelings only.
Donaldson then used examples from precedent cases on what a binding HoA should look like and consist of if it is to have any meaning going forward to a formal legal document.
Both Donaldson and the judge commented that the examples “looked like they had been prepared by a lawyer”. Which they had and MZN & KDR documents hadn’t.
Donaldson used further examples of precedent cases and authorities on this type of law.
I made a note to the effect that Donaldson was carpet bombing Bennett with precedent cases and authorities.
He moved on to say that MZN had long had knowledge of the material facts but went through a 7 month status quo until the 11
th November 2016.
Judge remarked: “ Remembrance Day” !
Throughout numerous ASX release by KDR and a capital raising on 17
th August for $21m to define lithium and gold at mount Holland Marindi made no claim.
The judge seemed a little surprised to think that people had been allowed to part with their money for KDR shares not knowing that in Marindi’s eyes there could be a deal for the Lithium rights, they should have spoken up If they thought they had a deal.
Donaldson summed up that MZN knew of:
- ASX Announcements by KDR regarding Lithium
- Sums spent on exploration by KDR at MH
- Capital Raising $21m for MH and working capital
- The MOU with POS for toll processing Li
Marindi themselves even had a capital raising in June issuing 191,200,000 new shares and never once mentioned anything about a lithium deal with KDR.
Donaldson went on to discuss ‘unclean hands’ basically this all came down to an email that JT sent to MD on Fri 11
th Nov after market closed telling MD he had a limited time to put pen to paper on the deal or he was going public.
This said Donaldson was JT washing his hands by giving MD time to sign a deal before the market opened on Monday.
JT then contacted MD on the Sunday 13
th Nov and said “ Hi Martin, failing the response (to the email on Friday) unless we get a positive response we will be making a release pre open tomorrow”.
JT also said he was confident in MZNs position of 50/50, 100% upside and zero % downside for MZN but KDR have a 50% chance and 100% downside.
GD remarked that these were interesting mathematics.
GD stated this was all calculated to hit the share price of KDR. He said MZN are not interested in specific performance they want a broader deal ref Li and timed to coincide with the Kidman AGM on the Monday morning.
GD “This all amounted to nothing but a threat and was appalling behaviour” “And still MZN were using the court as a threat”.
GD submitted his closing statements to the judge.
Bennett (yawn) Took to detailing his closing statements
He started by saying GD had gone off his submissions and closing case and expanded the scope of these.
Bennett said it was wrong of GD to state that Marindi knew when the KDR AGM was as no MZN Bod had been x examined as to this point.
Bennett began to quote Vantage systems and Masters Vs Cameron cases.
This in my opinion went nowhere, he may have made a valid legal point but it was lost on me.
Bennett then went on to highlight a recent case in NSW which may be applicable. The judge stopped him and said “It Doesn’t get across the Nullabor”. Bennett tried again and the judge remarked “it is nice for NSW to tell us what happens here”…………………
Bennett then went on an explanation as to the fact that regardless if detailed tenements were listed in an agreement or not those same tenements were listed in KDR’s announcement when they bought the tenements for MH, he detailed ASX releases and argued the point that from the date in the releases KDR became the custodians of the tenements and hence could deal in them (sell them).
KDR never actually owned the tenements until 7
th July 2016 and some of them were subject to JV’s.
Bennett went on about KDRs cash position and how it was necessary for them to sell the Lithium rights as it would help their planned share placement which was set for 8.5c but the share price at the time was below this.
Give Bennett his due, he did paint a rather grim view of the finances of KDR and I could see where he was coming from. Bennetts problem arose when he said the company was almost insolvent.
The judge chipped in that a lot of these type of companies (explorers) run at a loss.
Bennett highlighted again KDRs debt position and again said they would have soon be insolvent.
The judge remarked that that depended on their relationship with Capri.
Bennett said yes Capri, their major shareholder to whom they were indebted and in effect Capri had control of Kidman.
Bennett talked about MDs comment that the Marindi offer was ‘beer money’ and implied that MD meant in contrast to the debt position of the company.
I felt that Bennett was starting to argue his own points against himself, totally my view only.
I felt if he could have backed this argument up with more meat on the bone then he may have had a point worth taking further.
The judge did say in relation to the above point that MD still had a fiduciary duty to Kidman and Kidman shareholders to evaluate the MH ground prior to any sale.
I felt what he was saying is that just because the company may have been in debt then it doesn’t mean MD has to run off and sell to the first person who makes an offer. He is entitled to perform a detailed valuation of his asset.
Bennett continued with detail around the offer and the language used. He made some good points from the communications MD made. MD agreed for MZN lawyer (Eaton) to draft a HoA. Bennett stated that there is no suggestion and agreement should be suspended until a HoA is drafted.
Bennett also stated that through all communications between MD and JT that no impression had been given that the KDR board needed to approve the proposed agreement with MZN.
Bennett highlighted that MD had told the other interested parties (Platypus & McArthur) that he would no longer deal with them regarding the Lithium as he was now only dealing with one entity which was MZN.
The judge commented that all MD had done was given MZN exclusivity based on their proposal, it did not mean that a deal had been done.
Now this next point totally flummoxed me and got a few grins around the bar of the court and again the judge had a comment.
Bennett said that proof of a deal was that MD had wanted to issue a statement in April regarding discussions with MZN. JT had requested no statement went out. His reason in internal MZN comms was this, as no deal was finalised he didn’t want others to become aware of the lithium and maybe hijack negotiations or gazump MZN.
The judge remarked that MZN were happy to announce 7 months later when still no deal had been completed.
It was here that I felt Bennett was on to a losing battle with his closing statement.
Bennett continued with numerous statements and points around the ‘curveball’ and how this had been a dishonest statement from MD. Some laughter went around the court when Bennett kept referring to ‘a deal’ and the question from GD was ‘what deal’?
As I mentioned in another post on here today, the jilted bride analogy was again mentioned and Bennett made much of MD’s promise to come back and deal with them at a later date. A comment was made across the court referring to a bride and groom at the alter and the groom leaving her saying ‘ it’s not that I don’t love you, I’ll be back I promise’
GD remarked – but we aren’t married yet! More laughs har har har
He argued that because Marindi had alerted Kidman to the lithium then they should be entitled to some kind of honesty in dealings with Kidman and MD. This brought a few wry smiles around the court and that to me was the clutching of straws.
Bennett submitted his closing statement. The nuclear bomb I was expecting from him never came, I've seen bigger explosions on bonfire night!
I won’t go into the talk at the end around decisions being announced and then reasons to follow as I have just seen that
@Freehold has done this and possibly others.
We now await the judge decision but I have seen nothing (unless it is hidden in Bennetts ramblings) to make me overly concerned about a negative outcome for Kidman.
My take on the last 2 days has been this:
Yes there has definitely been talks between the companies regarding Lithium as we all know, MZN were keen to deal and I think KDR were as well initially however they stopped short either by sheer luck or by wanting to genuinely check out their own ground. I can see why MZN feel that they have a case, however their actions subsequent to the 11
th April after which all negotiation communications stopped (emails text etc) I feel they have done themselves harm. Had they brought this up in Say late April or early May I think there may have been a different feel to all of this.
With regards to Kidman, My own opinion is that the board needs strengthening, I think MD needs some experienced Director support around him at an equal level. I do not think for one minute that he has done anything wrong and I don’t think he was wrong to undertake the negotiations not knowing what we now know. However someone more astute to sit alongside him and guide him through what are going to be extremely testing times with any T/O negotiations or off take agreement talks etc. This is my opinion based on the standard of some of the negotiations that were aired in court.
I don’t know about others on here but I form an image in my head of some of the regular posters. I was lucky enough to meet @ Un1, I also know that I saw @ Mainy66 in court as well as
@aussieman.
Now I know
@Freehold said he wasn’t in court but the mental image I have of you was sat across from me this afternoon! I even think I may have spoken to
@mistie during Tuesday. Just my little fun so please don’t be offended, I haven’t outed any of you.
Hopefully in the next few days we will get back to discussing the world class asset that KDR have at MH, including gold and push on towards production. There are some great posters on here and
@Freehold has contributed so much as have many others in different ways,
@charlie123456 with his market analysis,
@Haplo , the guys who have attended court have filled others gaps in the narrative when points have been missed, it is important to get the message out to all holders who can’t attend. I can’t make the next 2 days in court but am sure there will be updates if anything decision is made.
Like I said earlier today, we are all pawns who put our hard earned cash and trust in these guys to run these companies for our financial interest. They need to realise they aren’t lawyers and should leave the legal stuff to the lawyers. They should have our interests at the forefront of their minds when they talk about unwanted metals/commodities/ores as an ‘irritation’ to them.
GLTAH
