trades not being settled, page-5

if someone shorted it where are asx asic Are the shorts going to be investigated??



ASX and miner at stand-off

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Barry Fitzgerald, Resources Editor
July 14, 2006
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KEY points of difference have emerged between Australian Mining Investments and an external expert the stock exchange appointed to vet the company's heavily promoted claim that its Rocklands copper discovery is a major find.

The failure to agree on a revised and updated report that satisfies stock exchange reporting requirements for mineral discoveries has been holding up the stock's return to trading.

Chairman Wayne McCrae said he thought the company had satisfied all concerns. But last night a company spokesman said both parties could not agree on several issues.

AUM — the company's stock exchange code — has not traded since July 5, when it briefly touched $10 a share and had a $1 billion market value. The bull run in the shares started on June 29, the day the company slapped an "inferred mineral resource" estimate of 59 million tonnes grading 2.04 per cent copper equivalent (it gave cobalt and gold credits a copper value) on to its Rocklands find.

Despite the bull run — which was led by day traders and had the added spice of allegations the stock had been short-sold — there has been interest in the speed with which the estimate was arrived at, as well as the reporting of the resource on a copper-equivalent basis.

The lengthy delay in the return to trade has prompted talk that some traders in the stock on July 5 have refused to settle their trades. As much as $5 million in trades is said to be involved.

Another junior exploration company has gone into a trading halt after attracting the stock exchange's attention when its enthusiastic announcement triggered massive share price gains and a trading surge.

Smarting from criticism that it acted too slowly in the AUM case, the exchange moved quickly yesterday in responding to Frontier Resources' announcement that: "Frontier acquires 100 per cent of a 340,000 tonne copper plus 51 tonne gold inferred resource."

That fuelled hectic trade in Frontier's shares, which rocketed 36¢, or 300 per cent, to 48¢ a share on turnover of 8.1 million shares by the time a trading halt was applied. Day traders did not care that there was nothing new in the announcement.

It involved Frontier's Kodu copper/gold deposit in Papua New Guinea. The company has owned it for several years but its Canadian partner walked away recently. Full ownership reverted to Frontier and this was the reason for the announcement.

The inferred resource estimate was also not new. It is based on work done by BHP many years ago. The main concern of the exchange with Frontier's announcement was the enthusiastic extrapolation by Frontier of Kodu's value based on a "hypothetical reserve" that, under one scenario, came up with a value of more than $1 billion.

Frontier's time off the lists is expected to be short-lived, with the exchange seeking clarification of a couple of points and a tightening of the language used.
KEY POINTS

■Rocklands copper report fails to meet ASX requirements.

■Australian Mining Investments is still suspended from trading.

■Rumours abound that some buyers will not settle trades.