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Screenshot of a breaking news alert e-mail from Q2 2017
ASIC announced that has restricted Axiom Mining Limited from issuing a reduced content prospectus until 28 March 2018.
The decision means Axiom Mining will not be able to rely on reduced disclosure rules and must issue a full prospectus in order to raise funds from retail investors.
ASIC’s decision was based on information given to the market by Axiom Mining on several occasions in relation to which Axiom Mining did not disclose a reasonable basis and that therefore was likely to be misleading. The first occasion was an announcement purporting to report the results of a pre-feasibility study. The remaining disclosures related to various market updates and a prospectus lodged subsequently in March 2017. Axiom Mining released corrective informative following intervention by the ASX and ASIC however, in the time between first release of the information and the release of the corrective information, the market was uninformed.
ASIC Commissioner John Price said:
A company’s ability to use reduced disclosure rules is predicated upon it meeting its ongoing disclosure obligations.
If this doesn’t happen, ASIC will intervene so that companies seeking to raise funds from retail investors are required to issue a full prospectus. This ensures that current and potential future shareholders are in a better position to assess a company’s prospects and financial position’, Mr Price added.
Axiom Mining has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decision.
Under the law, a listed company can offer securities using a reduced content prospectus containing information relating only to the particular offer itself.
ASIC has the power to prevent a company from relying on these rules if the company breaches its continuous disclosure or financial reporting obligations.
On 12 August 2016, Axiom Mining announced to the ASX that it had completed a pre-feasibility study in relation to its Isabel nickel project which included life of mine forecasts, capex and opex costs and production forecasts.
On 16 August 2016, Axiom Mining issued a retraction on MAP of its pre-feasibility study, including as a reason for doing so the fact that the statements in the 12 August announcement relied on historic data, (which was in contravention of the ASX Listing Rules) and as such investors should not rely on the production targets and financial forecasts stated in the PFS Announcement.
On 1 March 2017, Axiom Mining issued a rights issue prospectus. On 28 March 2017 Axiom Mining issued a supplementary prospectus that included corrective information. The supplementary prospectus provided material corrective disclosure to the market as it disclosed Axiom Mining’s intention:
- to conduct bulk sampling on its tenements, which was inconsistent with previous statements in the prospectus and to the market that it would be mining; and
- to be bulk sampling on its San Jorge tenements in 2017, but not necessarily on Kolosori, which was inconsistent with previous statements in the prospectus and to the market that it would be conducting activities on Kolosori in 2017.