The Sting

Clean Global Energy Ltd, before it changed its name to Citation Resources Ltd (CTR) entered into agreement with the shareholders of Citation Resources Pty Ltd (or Citation Resources Aus Pty Ltd, there is some confusion) (CRA) to purchase the private company and its right to farm-in to LAR.

There is an outstanding forward funding obligation by CTR to the Vendors of  CRA.

An update to this outstanding obligation was stated in Brett's email to Freddyjames and posted this afternoon ---

""" There is a loan carry requirement for a further $12m for the 30% interest for project spend (from $13m-25m total), after which all parties are heads up. This loan is about half way completed and is repaid as a priority by the 30% LAR shs from their share of ongoing Atzam 4 monthly production revenues """

There is a penalty clause with respect to this forward funding obligation in the agreement between CTR and CRA, voted on and accepted by shareholders at the 2012 AGM.

""" In the event the Company fails to satisfy the above future funding commitments in the time specified, the Vendors will be entitled to buy back all of the shares in Citation Resources from the Company for a consideration of $1.00. """
(This is an excerpt from p10 of Notice of Meeting 6th Aug 2012.)


The critical point of this post is as follows :

If CTR is forced to liquidation it would not be able to meet that obligation.
IMO the liquidator would have no option but to accept that the $1.oo clause has come into play.

The Vendors, listed on p28 of that Notice of Meeting, will then get CTR's right to 60% of LAR returned to them for $1.00.

It is possible that LAR's reticence to proceed in the best interests of its major shareholders, CTR and RRS is solely to undermine CTR's share price and to eventually force liquidation. It is possible that LAR is acting in this way in concert with CTR, not necessarily with the unanimous support, or full knowledge of CTR.

If this sting is to happen by agreement the meeting of project jv partners next week will not influence the future actions of LAR who are operators of the project, and pressure will continue on CTR's SP.



The purpose of this post is to ensure that this sting does not happen, if possible.

CTR shareholders and option holders should make it quite clear that they expect a satisfactory outcome for them in Guatemala next week.
They should also make it clear they will not accept exorbitant or extortionate claims from LAR.
It should also be made clear that fully documented reports will be released to ASX, Asic and Interpol and the media both in Australia and Guatemala if necessary.



As stated this morning I have cleared my position in CTR heads and oppies, except for a few oppies which are not tradeable. I make this post for fairness sake.
However I may buy back again if the outlook eventually changes as I hope it will.

Going forward we need a new board for CTR, the above problems are probably the reason nobody has volunteered to accept the challenge although it has been offered, and a tight agreement with LAR.

Of course GL to everybody and I hope this post sparks healthy and incisive debate.