Auris Minerals chairman Bronwyn Barnes has disclosed that some of the people seeking to oust her had been negotiating a farm-in proposal last year without the knowledge of the company’s board.
Ms Barnes said the March 2017 proposal, which was prepared by stockbrokers Andrew Frazer and Gary Castledine, was inferior to a subsequent farm-in deal the company signed last month with Sandfire Resources.
Her disclosure comes one month after a group of shareholders with an 11.05 per cent stake requisitioned a general meeting, calling for the ousting of Ms Barnes and independent director Susan Vearncombe.
The Michael Fotios-chaired investment company Investmet, which nominated Ms Barnes as a director in November 2016, responded two weeks later with another requisition, seeking the removal of a third director, Robert Martin, from the Auris board.
The Mandevilla group recently disclosed that Mr Martin was an associated party.
Ironically, Investmet was introduced to Auris by Messrs Frazer, Castledine and Martin in late 2016 but has subsequently had a falling out.
“Since that time, we have become very concerned as we are aware of Mr Martin, Mr Castledine and Mr Frazer endeavouring to divest the company of assets without having authority from the board to do so,” Mr Fotios said in a letter to shareholders last week.
Ms Barnes shed more light on the dispute today, saying the March 2017 proposal “appeared to have been under negotiation for some time without the knowledge of the Auris board”.
“Mr Rob Martin had knowledge of this proposal and had been involved in discussions with Mr Andrew Frazer and Mr Gary Castledine regarding the joint venture proposal and tabled to the board that Mr Castledine was expecting to receive a fee of $250,000 in recognition of his involvement in bringing the offer to the company.”
The 2017 proposal involved the incoming partner spending up to $12 million to earn a 75 per cent stake in Auris’s Doolgunna, Morck’s Well and Cashmans project areas.
The incoming partner also obtained certain pre-emptive rights.
The alternative deal the Auris board has endorsed involves Sandfire funding exploration and delivering a feasibility study, and in return getting a 70 per cent stake in the relevant tenements.
Ms Barnes said the 2017 proposal would have significantly encumbered all of Auris’s projects in the Bryah Basin and left the company as merely an exploration division of the JV partner with no independence or associated corporate appeal.
Ms Barnes said it also would have handed over control of a majority of the company’s assets without a discovery.
In contrast, she said the Sandfire deal resulted in the company being well funded and fully leveraged to the future exploration success on its wholly owned projects, and only diluted interests in the farm-in tenements following completion of a feasibility study.
Ms Barnes noted that no fees were paid to a third party in relation to the 2018 transaction.
Investmet has doubled its voting stake in Auris over the past two months to 15.8 per cent.