Compass Resources

Compass Resources NL is an Australian mining and mineral exploration company listed on the Australian Stock Exchange and currently in voluntary administration since 29 January 2009.^[1]

The company's main assets are mineral resources at Browns, Browns East and Mount Fitch, adjacent to the former Rum Jungle uranium mine in the Northern Territory of Australia. Brown's consists of a multi-metal oxide deposit overlying a related sulphide deposit.^[2] Compass also has exploration rights over the site of the former uranium mine and some royalty rights on a gold mine in New South Wales.^[3]

Mining in the Northern Territory

On 29 January 2009, Compass Resources went into voluntary administration, while in the process of commissioning the Brown's Oxide mine.^[1] Compass (CMR) was listed on the ASX with the fourth-largest lead deposit in the world, plus numerous other deposits with the potential value in excess of $15 billion. The Company was chaired by mining magnate Gordon Toll. The company was awarded major project facilitation status by the Australian federal government and endorsed as a “Major Project of National Significance”. The company formed a joint venture with Hunan Non-Ferrous Metals Corporation (HNC). As Compass undertook capital projects to develop and extract lead and other metal ores, costs appear to have blown out.

The ASX placed a trading halt on CMR on 28 Jan 2009. Gordon Toll did not show up at the 29th January 2009 shareholder EGM to advise shareholders of the devastating news that rather than a debt for equity swap at 42 cents/share as approved by shareholders that Compass Resources was in fact suddenly being placed into administration. Shares had been issued to both YA Global and Coffee House (Gordon Toll) in exchange for debts owing to them by CMR. CMR shares were suspended from trading on 29 Jan 2009. The company was later placed in administration. Mr Toll has not corresponded with shareholders or made any statements in relation to Compass Resources ever since which is in stark contrast to the way he and his board was promoting the company right up until administration.

Ferrier Hodgson was appointed on January 29, 2009, as deed administrators of a deed of company arrangement DOCA. The initial DOCA proposed that shareholders would face a large dilution of their equity to less than 5% deemed share price of 2.5 cents. The Friends of Compass Resources proposed a revised DOCA to reach agreement of 10.1% - 4 cents deemed and a relisting of the company in 2011. Shareholder equity in the company which was 93 per cent prior to it going into administration was seriously eroded. http://www.zoominfo.com/p/Gordon-Toll/63125826

In 2015 Ferrier Hodgson advised shareholders that claims could be made to the ‘Compass Resources Creditors’ Trust’ (Martin Jones, Ferrier Hodgson, Perth) for losses incurred by share-holders who had purchased shares between 1 May 2008 and 29 January 2009. A short time frame in which to lodge claims was imposed.

Claimants were requested to provide evidence meeting three criteria:

1. “Specifics of any alleged misleading or deceptive conduct or alleged failure of CMR to comply with its continuous disclosure obligations. You must advise as to: • What conduct of CMR you say is misleading; • How you became aware of that conduct (ie if it was information, was it from public announcements or some other source); • What material information you say CMR ought to have disclosed, but did not; and • Why you say that the conduct is misleading, or the information sufficiently material to require disclosure;

2. “Evidence of your reliance on the alleged conduct or omission, by reference to the steps you took or failed to take by reason of the alleged conduct or omission or perhaps how you would have acted differently, but for the alleged conduct or omission; and

3. “Evidence of the loss suffered by you and how the relevant conduct or omission caused that loss.”

A number of claimants contacted Ferrier Hodgson and made claims as they understood that the Board and Executive of the company are bound by statute and regulation to fulfil their fiduciary duties.

While shareholders were listed in the Compass Resources share register, claimants were required to prove that they held Compass shares.

Shareholders believing that they were genuinely misled by CMR in the period between 1 May 2008 and 29 January 2009 made claims to Ferrier Hodgson. Shortly after lodging claims claimants were advised in a one line rejection that their claims were not considered valid. When requested to provide evidence that claims had received an honest evaluation Ferrier Hodgson refused to provide. Ferrier Hodgson referred claimants to take legal action through the Australian court appeal process.

References

1. 1 2 Compass Resources ASX announcements 2009 accessed: 10 September 2009
2. ↑ Francis, Adrienne (2006-02-22). "Renewed activity around Rum Jungle". ABC Rural: Northern Territory (Australian Broadcasting Corporation). Retrieved 2007-02-22. 
3. ↑ "New South Wales resources". Compass Resources. Archived from the original on 2007-02-18. Retrieved 2007-02-22.  and "New South Wales exploration". Compass Resources. Archived from the original on 2007-02-18. Retrieved 2007-02-25. 

External links

• "Compass Resources NL company web site". 2005. Retrieved 2007-02-22. 
• "repository of Rum Jungle news articles". 2007.