General Discussion, page-933

Australia’s first convicted pump and dumper is behind two companies trying to secure mining exploration licences on NSW’s north coast, raising alarm for residents concerned about his involvement in potentially disruptive projects in the region.

**riel Govinda, also known as **riel Hewitt and **riel Govinda Hewitt, is the ultimate shareholder of Pinpoint Prospecting and Historic Gold Mines via a series of companies.

Pinpoint Prospecting has three pending exploration licence applications near Forster, Maitland and Kempsey. Historic Gold Mines has a pending application for a licence near Coffs Harbour. In August, the company was granted four mineral exploration licences near Adelong, Young, Cooma and Oberon.

The NSW resources regulator said it had commenced an investigation into Pinpoint and Historic Gold Mines after a complaint.

“As an investigation is under way it would be inappropriate to comment further,” a Resources NSW spokeswoman said on Tuesday.

In 2022, Govinda was convicted of running so-called pump-and-dump schemes after pleading guilty to 23 counts of market manipulation and 19 charges of illegal dissemination of information relating to the manipulation.

Pump-and-dump schemes are when people hype up stocks to inflate their price, then sell the shares as they become overvalued, leaving new investors stuck with the losses once the shares return to normal levels.

Hamish Barker and Gary Spreckley, who own property near Bunyah in one of the areas where an exploration licence has been applied for, said if it is granted, it has the potential to hugely disrupt farming, businesses and property values.

“It’s very concerning that the person behind the applications has criminal convictions for stock market manipulation and operating pump-and-dump share schemes,” Mr Spreckley told The Australian Financial Review.

“There seems to be more control and regulation around getting a liquor licence for a small cafe than getting a mining licence that can cover hundreds of square kilometres of farming land, wildlife habitat and water catchment areas and have huge impacts on the lives of thousands of people.”

The granting of an exploration licence does not permit mining and does not necessarily mean a mine will be built.

When approached, Govinda told the Financial Review he was surrendering the tenement near Mr Barker and Mr Spreckley “in order to allay any perceived or actual concerns from the couple that complained”.

Govinda’s conviction involved hyping up largely minnow ASX resources stocks between September 2014 and July 2015 via the day-trading forum Hot Copper under the online identity Fibonarchery. He used 13 different trading accounts, held in the names of relatives and friends, to manipulate 20 different listed stocks.

A search of Govinda’s home in 2015 found a notebook detailing how he used the forum. “Buy big parcels of small-cap cash-backed resource shares at reasonable price, alert H.C Daytraders to the action sell to them at higher price at end of day,” one entry read.

Other entries included that he would “sell to self to create illusion of volume” and “sell stock down to yourself then buy stock up to yourself. Buy cheap, make it expensive again, sell to others”.

Govinda’s conduct occurred before reforms in March 2019 increased the maximum penalties for such offences to 15 years in prison. He was sentenced to 2½ years in prison in May 2023, but released immediately on a five-year good behaviour bond.

ASX-listed Trigg Resources is one miner that has done deals with companies associated with Govinda.

In October, Trigg acquired exploration applications on the NSW Mid North Coast from Pinpoint Prospecting and Obscure Metals, another company leading back to Govinda via Historic Gold Mines, for 4.5 million shares and $10,000 cash.

Trigg also bought a tenement and exploration application from Bullseye Gold in September for 106 million shares. Bullseye, via another company, is owned by Julia Beckett, an associate for Govinda. Ms Beckett is on the board of a number of Govinda’s companies. Her company, Weyburn, bought Bullseye from Govinda’s Aerobotics in August. Aerobotics is the ultimate shareholder of Pinpoint and Historic Gold Mines.

Trigg issued shares to Weyburn at 0.008¢. Shares were trading around 0.02¢ when the deal was announced.

“Trigg Minerals Limited considers that it has undertaken, and continues to undertake, appropriate due diligence in relation to the proposed acquisitions from Pinpoint Prospecting Pty Ltd, Obscure Minerals Limited and Bullseye Gold Pty Ltd,” Trigg executive chairman Timothy Morrison said.

He said the company’s share price was 0.008¢ when commercial terms were negotiated with Bullseye, and that Trigg believes its share price between then and when it announced the deal was down to an announcement earlier in September that it was commencing drilling at another site.

Local residents, including Mr Barker and Mr Spreckley, have gone to NSW Greens MP and mining spokesperson Cate Faehrmann for help. She said the Minns government in NSW was advertising itself as investment-ready when it comes to new mines but shows no regard for the impact on communities.

“Every time an application is lodged by a company to explore for coal or gas or minerals, it has an enormous impact on affected communities. It’s totally unacceptable that someone with a history of market manipulation like this is allowed to apply for an exploration licence at all,” she told the Financial Review.

She said local landowners had been told there is no mechanism to object to an exploration licence application, and the government should change this to strengthen integrity in the planning process.

In a late-night session of parliament last month, Ms Faehrmann told the NSW Legislative Council: “What have we stumbled across here? It is the dubious world of speculative and opportunistic ‘nickel and dime’ mining share trading, a world where shonky speculators are lured by get-rich-quick schemes that dupe people out of their livelihoods and savings.”

Govinda denies any wrongdoing. “Nor have any of the companies I’m associated with ever ‘spruiked’ any of the mining projects sold. If the ASX company feels that the tenement purchased is worthy of promotion, that’s entirely up to them. Nothing to do with me whatsoever,” he said.

Ms Faehrmann broke down her understanding of the schemes to parliament. They involve, she said, the setting up of private companies, which apply for mining exploration licences via a third-party agent.

“Once the application is granted, the company sells itsexploration licence to a mining company, ideally a listed one, usually for amixture of cash up front or shares,” she said.

“The cash payment is minimal, with the balance of thepurchase price covered by an issue of shares in the mining company that ispurchasing the exploration licence.”

Shares are then issued in the mining companies, usuallyat a very low share price. “The private company starts spruiking the prospectsof the mining company that has purchased the exploration licence in the hopethat the price of the shares it received from the mining company increases,”she said.

“Once the price starts rising, the company startsoffloading the shares it received from the mining company, a practice known as‘pump and dump’. It is not unusual for mining companies to run out of money andcollapse in a pile of debt, their share price crashing and becoming worthless.”