I would like to bring the following matter to your attention for urgent action;
The proposed deal to sell Crown/Coors/Swan deposit to Forge Resources for $20.7 MILLION
The � Independent Board Committee � has commissioned Grant Samuel to prepare a report for shareholders to consider at the EGM to be held on May the 18th 2011. At the EGM shareholders are to vote on resolution to approve the Lynas Forge master agreement.
That, for the purpose of Chapter 2E of the Corporations Act and all other purposes, Shareholders approve and authorize completion of the proposed transaction with Forge Resources Limited (ACN 139 886 187) on the terms and conditions set out in the Master Agreement entered into on 15 March 2011 which is summarized in the Explanatory Memorandum which the Notice of Meeting forms part of:
In the early 1990's Mr Nicholas Curtis worked for China National Non Ferrous Metals (CNNC) a Chinese Communist Government owned company, under Mr Luo Toa who now controls CNMC, the Chinese company which recently offered $500million for a 52% stake in Lynas corporation. The shareholders voted NO and the FIRB very sensibly vetoed this deal which seems to have been recommended by Sino Resources Capital a company founded by Nick Curtis. A subsequent capital raising by Lynas (which the LYC board had advised was not a feasible option) allowed the company to continue in Australian shareholder's control (or should I say ownership).
Rare earths are a strategically valuable resource and China currently controls 97% of world production and has cut exports in recent years. This is a resource Australia should guard very carefully as the REOs are required for the technologies of the future such as wind turbines, hybrid cars, electronics etc
Mr Nick Curtis, who is Executive Chairman and Managing director of Lynas, sought and received "external advice" on the decision to sell off the Crown deposits to Forge (FRG) at $20.7m from Riverside advisory a company which it seems Mr Nicholas Curtis just happens to control. It appears that Sino Resources Capital changed its name to Riverside advisory about a week before the announcement of the deal with Forge Resources. Mr Nick Curtis is Chairman and a major shareholder (15-16%) of Forge Resources and just happens to have been awarded 24,000,000 performance options in FRG by the FRG board.
These performance options convert into ordinary shares in Forge Resources if the company discovers a JORC compliant resource above a certain size. Co-incidentally if the Crown deposit is sold/sub-leased to FRG then this condition is satisfied and Mr Nicholas Curtis receives 24,000,000 shares in FRG (current share price $1.12 approx $26.8M) bonus for nil consideration or work done on behalf of shareholders.
In Feb 2007 in a LYC presentation LYC valued the Crown deposit at >$50 BILLION in ground metal content value based on 2005 rare earth prices.
Forge resources has 21,114,000 shares currently on issue and has a market cap of $24M, when Mr Curtis receives his 24,000,000 shares the he will effectively become the majority shareholder holding 53% of shares on issue. As the majority shareholder he will be in the position to do exactly what he wants with the Crown Polymetallic resource. It will be very interesting to see if Mr Curtis offers his former Chinese business associates a stake in the Crown deposit in order to meet exploration and development costs.
It also appears that almost all the directors at Forge Resources have worked or acted as consultants to Lynas in the past.
Obtaining a resource valued at > $50Billion dollars in ground metal value for $20M would have to be the bargain of the century. Given the subsequent rise of the Rare earth basket prices by >570% since 2005 the theoretical value of Crown deposit must now be >$280 BILLION in ground value. $280B divided by $20M gives a multiplication factor of 1352 which certainly makes the current $20m valuation seem totally absurd.
I would ask that the Minister and the Department look into this whole affair and put a stop to it as soon as possible in both Australia�s National and strategic interests.
Please also refer this matter to the Assistant Treasurer Mr Combet as I believe there are possible breaches of corporations law that his Department needs to look in to.
I have also lodged a complaint with ASIC over this matter and have asked them to act to have this proposed agreement stopped.
Regards
jukieoz836 Concerned Lynas shareholder
LYC Price at posting:
$2.22 Sentiment: Hold Disclosure: Held
(20min delay)