CLY needs to provide more detail around the context of the original announcement on 15/6/2017. Without the historic mines, this prospect might as well have been selected with a map of Austria and a pin.
I was attracted both by the "acquisition" and the management - DL plus KM/Cadence added up to significant experience in European historic mines. I am concerned that there appear to be rookie mistakes made here, one in not being aware of the Austrian "priority" system in issuing ELs, with obviously inadequate due diligence, and then announcing this as an acquisition, with the firm connotations to potential SH that the project was in the bag.
One would think that with the experience on this board of deals done in Europe for Cadence, EMH, EUC, AUO that there would be a basic level of familiarity with Austrian systems. As I find it unlikely that CLY would have come across this prospect in Orange, NSW, and that they have DL and KM coming on board in a timely manner, the question as to who was the finder for the prospect, and what will now become of the fee:
A finder’s fee of $10,000 cash based consideration and a further 6,666,667 fully paid ordinary shares was paid to secure the Leogang Project. In addition, in the event that Clancy elects to mine the Leogang Project a further $300,000 will be payable to the Finder, in a mix of cash and shares.
I am puzzled as to why it appears that both DL and KM were aparently convinced of the prospect, with DL tweeting his excitement from a mine inspection, and Cadence exercising its 10% buy-in, but with their experience and resources for due diligence the basics were done so poorly. DL appears to have benefited from issue of shares on becoming a Director, while Cadence won't be happy that they have bought into 10% of zip.
Also relevant to the response to this is whether there legal recourse in relation to the issue then "lower priority" being assigned to CLY, and for up front finders fees and shares, can CLY reclaim these?
Given that in 20/20 hindsight statements within the Acquisition annoucement of 15/6/2017 were patently false, including:
"Clancy has been granted exploration licences (Schurfberechtigung) over the relevant area. Exploration licences grant the holder the exclusive licence to explore and are valid for five calendar years"
I would think that CLY should issue a further clarifying announcement, and/or that the ASX should be asking for a please explain, with some depth of information including the sequence of events leading to the acquisition announcement, the identity of the finder, the fate of the fees, and the level and nature of legal advice obtained leading to the missing of something as fundamental as the "priority" system for ELs.
