ASX-listed company Gold Mountain Limited (Gold Mountain) has informed the public that it has paid a penalty of $33,000 after Australian regulator ASIC issued an infringement notice for an alleged failure by Gold Mountain to comply with its continuous disclosure obligations.
ASIC has also restricted Gold Mountain from eligibility to issue a reduced-content prospectus until 20 July 2019. The decision means Gold Mountain will not be able to rely on reduced-disclosure rules, but instead must issue a full prospectus if it wishes to raise funds from retail investors.
The penalty and restrictions followed an investigation into matters arising from an announcement on 7 August 2017 by Gold Mountain to ASX. In that announcement Gold Mountain acknowledged and retracted public statements made on 27 July 2017 that did not comply with the JORC Code.
Compliance with the standards set out in the JORC Code is integral to a mining company’s meeting its reporting and disclosure obligations and ensuring that public reports have a reasonable basis.
The 27 July 2017 statements implied that Gold Mountain had established to the standard of reliability required by the JORC Code that:
- The mineralisation of their target drilling zone would be 281,350 ounces of gold;
- The gold in that target zone was capable of eventual economic extraction; and
- There was a reasonable basis for calculating $337 million in future revenues.
Those statements were not compliant with the code, as they were not based on the work of a suitably qualified and experienced person.
ASIC alleges that Gold Mountain should have made the retraction on 27 July 2017.
Cathie Armour
ASIC Commissioner Cathie Armour said:
Listed companies must immediately notify the ASX of information that a reasonable person would expect to have a material effect on the price or value of the company’s securities. This obligation also applies to correcting misinformation of which the company is aware and publicly available.
The official announcement can be seen here.