Burdekin Pacific Limited ABN 66 059 326 519 Level 13 BGC Centre 28 The Esplanade Perth WA 6000 PO Box Z5037 St George’s Tce Perth WA 6831 Telephone: +61 8 9322 6045 Facsimile: +61 9481 5557 15 November 2004
Dear Shareholder, PLEASE ACT - SEND IN YOUR TWO PROXY FORMS NOW FURTHER RELEVANT INFORMATION FOR TWO MEETINGS ON 30 NOVEMBER
I write further to my previous letter and Notice of Postponement of Meeting dated 10 November 2004 to provide further information. Postponement of 17 November meeting (now to be held at 9.00am 30 November)
The Supreme Court of Western Australia has rejected an application by the convening shareholders seeking to challenge your Board’s decision to postpone the shareholder convened meeting to 9.00 am on 30 November 2004 (refer Notice of Postponement). The Supreme Court also dismissed an application by your company to cancel the shareholder convened meeting. Voting at the Two Meetings to be held on 30 November To elect the directors of your choice, you will need to ensure that you vote at both the shareholder convened meeting (to be held at 9.00 am) and the Annual General Meeting at 10.30 am, both meetings to be held on Tuesday 30 November 2004. If you vote only for the resolutions to be put at the annual general meeting you may not contribute to your desired result. Each meeting has separate proxy forms. If you have already forwarded a valid proxy in relation to the shareholder convened meeting and do not desire to reconsider the manner in which you have voted then that proxy (if delivered to the company within the relevant time) will be effective.
If you wish to change your vote or if you have not lodged a proxy for the 9am meeting, a fresh Proxy Form (blue sheet) is enclosed for you to complete and return directly to the Company. The lodgement of this fresh proxy will revoke your previous vote.
Position of RFC Corporate Finance Limited Mr Stephen Allen has written to me claiming his correspondence to one of our major shareholders referred to in my letter to you of 10 November: 1. was private and confidential and not intended to be received by the Company. 2. contained a typographical error in that he intended to say that administration was almost inevitable under the current board rather than the new board.
Our shareholder however has informed us that this is contrary to his conversation with Mr Allen and certainly contrary to the manner in which it was put to our shareholder.
Mr Allen agrees that he provided the other information that I have summarised for you in my letter of 10 November.
I have received a response from the Company's unsecured creditor Ocean Resources Capital Holdings plc, which confirms:
1. that Ocean will not entertain re-financing options with Burdekin whilst the present managing director and other directors supportive of him remain on the board.
2. Ocean has been in discussions with Mr Allen of RFC Corporate Finance.
3. Ocean informs me that it has reached broad agreement that if new directors were appointed, Ocean would "give favourable consideration to all reasonable re-financing proposals…through agreeing to an extension of the repayment date of the loan or alternatively a debt equity conversion at a price which would be seen as fair to both Ocean as lender and existing Burdekin shareholders". Ocean's correspondence identifies that its concerns with Mr Vitale centre upon Burdekin’s success in setting aside a statutory demand made by Ocean earlier this year for early repayment of the debt and Burdekin’s rejection (as unfavourable to Burdekin shareholders) of a previous debt for equity conversion proposal. The proposal was the same proposal put forward by Mr Stephen Allen of RFC which involved a cancellation of 9 out of every 10 shares held by existing shareholders and a major reduction in your interest in the company compared to incoming shareholders introduced by RFC.
For additional information I refer you to the Notice of Annual Meeting previously sent to you with the Annual Report, at section 9.3.
This correspondence from Ocean with your Company, as with its previous correspondence, is intentionally copied by Ocean Resources to Mr Stephen Allen.
Your Board's Comment
Mr Allen is not a nominee for your Board. It appears however that on behalf of the nominees put up by the convening shareholders (of which Mr Allen is one) broad agreements are being entered into as to Burdekin's affairs that have not been disclosed by the nominee directors to the shareholders of Burdekin.
The Board is considering a number of available options to refinance the Ocean debt. In view of the Company’s positive exploration results, a buoyant gold price and the high level of capital market interest in resources sector at present, the Board is confident that this debt will refinanced on acceptable arm’s length commercial terms that will maximize value for shareholders.
Conclusion It is of grave concern to your Board that shareholders are being asked to vote on what amounts to a change of control of your Company without receiving full information.
Once again if you have queries concerning any matter in this most important time in the history of your company please do not hesitate to contact Mr Vitale or Ms Field or myself.
Yours sincerely Martin Bennett Chairman
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BKS Price at posting:
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