PADBURY Mining has been forced to abandon its botched plan to...

PADBURY Mining has been forced to abandon its botched plan to revive the $6.5 billion Oakajee port and rail project after it failed to answer the corporate regulator’s concerns about the source of the funding.

The Perth-based junior explorer told the market on April 11 that it had raised 100 per cent of the equity needed to build Oakajee through an agreement with an unnamed entity, later revealed to be a company controlled by colourful Sydney business identity Roland Frank Bleyer.

Demand for Oakajee answers

But after being quizzed by the ASX and ASIC over the bona fides of the deal, Padbury went into a trading halt and was never able to disclose the ultimate source of the funding or whether any security arrangements were in place.

The Padbury announcement sparked scrutiny of Mr Bleyer’s past business dealings amid revelations of a string of failed business deals as well as civil and criminal cases brought against him in the US.

Mr Bleyer told The Australian last week he would find the money from a bank in the Cayman Islands.

This morning, West Australian Premier Colin Barnett said he had spent “about 30 seconds” considering Padbury’s plan to revive the long-stalled Oakajee project before dismissing it as unrealistic.

Late today, in a highly embarrassing backdown, Padbury said it had signed a deed of termination with Mr Bleyer’s company Superkite Pty Ltd.

It said the effect of the deed was to release and discharge the parties from any claims arising under the agreement or its termination.

“Padbury will continue to actively explore all available opportunities to exploit its existing intellectual property with respect to the Oakajee project,” it said.

The Oakajee infrastructure – which has been promised in vain by various parties over the past 30 years – would service the mines of the mid-west and open up a new iron ore export province for Australia.

Japanese corporate giant Mitsubishi last year abandoned its plan to build the Oakajee port and rail network, citing weaker iron ore prices and an inability to entice China to invest billions of dollars in the region.

Padbury’s announcement on April 11 sent its share price up as much as 170 per cent during the day, with about 200 million shares trading hands.

Padbury Mining chief executive Gary Stokes told The Australian on the day of announcement that the company’s plans were genuine.

“We wouldn’t have made an announcement on the ASX if it wasn’t,” he said.

“We’ve been working on this for quite some time – this is not new.

“We have been very much about under-announcing and over-delivering. There is a lot of cynicism there – some of it healthy, some of it not so healthy.”

It is understood the ASX is still demanding answers from Padbury about whether it was in compliance with its disclosure obligations on April 11.