I have held WMT/IDG shares for some time now and, like other...

I have held WMT/IDG shares for some time now and, like other shareholders, was hopeful for better things to come with the acquisition of Tanzanian Gold by the previous board, 10:1 consolidation, improvement of share price and proportional offer from GLI to improve my investment.

I must say I am disappointed with recent events which probably showed in my previous posts. I have since calmed down and done some research – back to fundamentals. I thought I would share my findings with my friends in the HC community.
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Not knowing a thing about the new management I decided to do a bit of digging. To find the roots I thought the proportional takeover bid by Goldlink Industries (GLI) now Blue Capital Limited (BIV) was a good place to start but it goes back quite a bit further than that ……….. so here is the time line:

Pre 2000 - Lakovision was founded by Peter Lamb and Evan Kourambas. This was a sports broadcast technology company and interactive graphics.

27 June 2000 - Pineapple Limited (ASX PNH) was floated at a 39% premium to its issue price of 50c with a debut of 69.3c. Kerry Packer’s nine network was the major investor at 6.6%. The company had two divisions Lako Vision (IT distribution and Pineapplehead (Sports graphics).

March 2001 – PNH shares slump to below 10c.

26 November 2002 – Pineapplehead was in trouble through poor investments. After trading at a high of 98c in 2000 shares in Pineapplehead closed at 3.2c. Kerry packer reduces his stake to 1%.

04 June 2003 - The Pineapplehead sports graphic software development business was sold to NZ’s Virtual Spectator leaving only the IT distribution arm.

01 December, 2003 – Pineapplehead Ltd was restructured and renamed Lako Pacific (ASX LKP).

In the mean time - 14 Oct 2004 – IncomePlus Ltd (ASX IPS) changed its name to GoldLink IncomePlus Ltd (ASX GLI).

05 October 2005 – After failing as a public listed company management (lamb and Kourambas) bought the Lako Pacific business back for $1.3m.

11 Oct 2005 – The remaining listed company shell was renamed New Opportunity Ltd (ASX NOL), with Mr Paul Andrew Hardie (Chairman) Mr Bryan Dixon (CFO) Mr Peter Aristide George Pynes (Director) and Mr Tim Kestell (Non Exec. Director). The activities were listed as ‘distribution of digital video editing products and products to enhance sports broadcasting’.

11 Oct 2005 to 14/12/2007 – please see http://www.delisted.com.au/Company/9359 (with thanks to delisted.com.au)
To cut a long story short during the three years there was only one heads of agreement for the purchase of certain rights associated with three African iron ore projects. The signing was on 20/08/2007 and was terminated 14./12/2007.

20 Dec 2007 – 29 Jan 2008 - Directors request to de-list NOL from the ASX. This was due to the company having no assets (apart from $2m cash) the company was classed as a 'cashbox' and the ASX restricted them from raising further capital prior to the acquisition of an asset.

2007-2008 Financial year - GoldLink IncomePlus lost $106 million and most of its market value through bad gold hedge fund strategies. Bell IXL and New Opportunity Ltd gained 20% equity each in GLI and seats on the board.

19 April 2008 - Bell IXL (BXL) and K. Pagnin Pty. Ltd tried a joint takeover of New Opportunity Ltd offering shareholders 1 for 1 shares (later extended to 1.2 for 1) in Longreach Oil. This was to gain a majority shareholding in GLI.

June 2008 - Controlled by former brokers Tim Kestell and Peter Pynes, New Opportunity Ltd changed its name to Emerald Capital in the hope of relisting on the ASX. Emerald Capital did not have significant operations. The company’s aim - to search for assets and businesses to purchase that would provide significant shareholder value.
(NB Emerald Capital did not list on the ASX).

14 July 2008 – Bell IXL withdraw their bid for Emerald Capital Ltd (formerly New Opportunity Ltd).

05 Aug 2008 – Emerald launches 45 % proportional takeover bid for GLI @ 23c per share – in competition with Bell IXL.

Jan/Feb 2009 – Emeralds 45% proportonal takeover of GLI completed.

16 Feb 2009 – Western Metals acquires Tanzanian Gold Assets.

06 May 2009 - Western Metals changes name to Indago and 1:10 share re-organisation is completed.

27 Mar 2009 – GLI board replaced by Peter Pynes, Tim Kestell and Karl Simich.

15 June 2009 - GLI acquired more than 5% interest in the shares of Indago Resources Limited (IDG). Subsequently the company agreed to acquire the shares in IDG from Desertfox Pty Ltd.
(NB Desertfox is related to GLI. Tim Kestrell is a director with beneficial interest).

17 June 2009 – GLI announces proportional off-market takeover offer for 8.79% of IDG shares on issue and appoint directors nominated by GoldLink and Desertfox. The offer was 50 GLI shares (@2c) for 1 IDG share (2c) representing a 42.9% premium.

14 Aug 2009 – GLI changes name to Blue Capital Ltd (BIV)

17 Aug 2009 – Miles Kennedy, Karl Simich and Matthew Fitzgerald replace George Bauk, Geoff Chapman and John Fitzgerald on the IDG board.
(NB Miles Kennedy and Karl Simich have used the GoldLink IncomePlus vehicle to secure a holding of 9.9% in Indago Resources).

21 August 2009 - BIV withdraws the proportional takeover bid citing the IDG purchase of the Kitango Gold Project in Tanzania and the Nyanzaga Project scoping study as a defeating condition for the takeover bid.

14th July to 15 Sep 2009 – IDG shares gradually fall from 70c down to 26c.

25 Aug 2009 – Tim Kestrell and Peter Pynes join the IDG board.

31 August 2009 – Miles Kennedy resigns as director of IDG.

02 Sep 2009 - The Indago board proceeds with plans to sell three of the Company’s projects – the Snowbird Project in Canada, the Mid Continent Nickel Project in the US and the West Georgetown Base Metals Project in Queensland.

07 Sep 2009 - Indago sells Snowbird and Mid Continent Projects.

09 Oct 2009 – BIV notifies a shortfall of 59,083,906 shares and 29,599,817 options.

14 Oct 2009 – IDG notifies a shortfall of 29,606,122 shares and 14,630,089 options

15 Oct 2009 – Karl Simich resigns from BIV and IDG. Simon Andrew appointed to BIV and Paul Hardie joins IDG.
(NB Remember Paul Hardie was chairman of New Opportunity Ltd – with Peter Pynes director and Tim Kestrell non-exec director so now IDG has the same board as NOL).

15 Oct 2009 – IDG Board announces spin off of Gold Assets.

Other points to note:

Tim Kestrell (non-exec dir app Nov 2005) has interests in Emerson Resources (ERM) a Tennant Creek gold exploration company.
Tim Kestrell is a director and has a beneficial interest in Desertfox Pty Ltd which holds 759,505 ordinary fully paid shares in Emerald Capital Limited.
Tim Kestrell is a non-exec director of Optimised Investments (unlisted).

Peter Pynes is the managing director of Optimised Investments (unlisted).
Peter Pynes is a director of MPC funding Ltd.

Simon Andrew (app Jul 2007) is a non-exec director in Emerson Resources.

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Well there it is. I don’t know whether all or nothing of the above is important for the future of IDG. I do feel it is relevant in my decision making.

I contacted Mr Peter Pynes mainly to ask him about the spin off because I didn’t know what it would entail. I tried to phone a couple of times. I also asked if he had an email but was told, by his secretary, that he didn’t use email.

Mr Pynes was gracious enough to phone me back. He said that the spin off would be a new IPO part owned by IDG and he felt it was the best way forward for the company. He said IDG shareholders could participate in the IPO if they wanted to. I can’t remember if I asked him if there was going to be a shareholder vote on the spin off – I must contact him again about that.

When I told him I was a long term shareholder and that I had invested in WMT originally because of their Uranium deposits in Tanzania. I told him I was concerned that they were being sold off too and what would IDG be left with. He advised me that they hadn’t been sold yet.

I mentioned the SPP and why was it necessary when there was money in the bank – especially if Tanzania Gold was to be ‘spun off’ and not developed. He advised me to read the prospectus and supplementary prospectus where it was all explained.

I also asked him about the revolving doors of management since the new team took over. He said it was fair comment but Mr Simich and Mr Kennedy had other commitments.

When I mentioned the slump in the share price he said that he was also a victim of that as he had bought his shares at 70c. When I took him to task over that (ie management didn’t own any shares) I think he realised he was caught out and that his interest in IDG is only through BIV. After doing the research above I had already suspected this. His interest in BIV was the takeover of GLI through Emerald Capital to get NOL listed again.

On another question about long term shareholders he did infer that any shareholders who had bought in at $2.50 would be silly if they still had their shares now.

My concern out of all this is:
1 When the new management team took over they included Karl Simich and Miles Kennedy who both have track records in mining. This would have swayed the share holder vote to oust the old team.
2 Both of these are now gone and I am left wondering about the credentials of the remaining directors related to mining. The companies they have been involved with so far have always struggled. I really can’t work out the intentions of the new management.
3 The transparency of the company is lacking. We are given one page announcements which don’t really explain anything - especially in relation to the ‘spin off’ and the distribution of the SPP shortfall.
4 I don’t really trust the spin off. If it is an IPO then which company will be picking up a majority stake. I hope it’s not Emerald Capital or Emerson resources. With the shortfall in both IDG and BIV majority shareholders in both companies will have changed.
5 What will IDG be left with. It will be a shell without Snowbird, Mid Continent, West Georgetown, Uranium along with Tanzania Gold being spun off. Even if we were to lose everything else bar the gold prospects, and mine the gold, at least, with today's gold prices, we would see some income at last. I am sure the previous management, no matter how good or bad they were, would have progressed to this end.
6 The SP is lackluster. I can’t see any light in the future to make it attractive – and management have not given me any hope. I realize that we need to give them time but I don’t think time is on our side. I honestly don’t know where this is headed.
7 Why were shareholders not told of the spin off before the SPP launch
8 Etc etc …….. so many questions.

Like I said before, I am a long term holder. I intended to participate in the SPP but I put all the money into the Options purchase in the BillPay section (silly me). This means I got the options and will be getting a refund on the Shares. Perhaps this is a blessing in disguise as I would not have participated if I knew of the spin off.

Hopefully my fears are unfounded and IDG turns out to realize the potential I hoped it would and management prove me wrong. Given time this may well be the case.

Good luck to all shareholders and please DYOR as I am just somebody trying to make sense out of all this.