A Hong Kong businessman with ties to a company whose shares are suspended after rocketing to 40 times their value is seeking to explore for uranium in NSW after the government invited his firm to apply for a licence.
Chi Ho William Lo is a director of EJ Resources, one of six companies invited to apply by Resources Minister Anthony Roberts last September after the state government overturned a decades-old ban on uranium exploration in 2012.
It followed an expressions of interest process during which EJ Resources was assessed in February and March by a panel that recommended Mr Roberts grant the company consent to apply.
It lodged three exploration licence applications on December 19.
But company records reveal Mr Lo and a fellow director, Siu-Wing Selwyn Chan, are former directors of Fifth Element Resources, which gained notoriety soon after listing on the Australian Securities Exchange in May last year.
Fifth Element Resources astonished market watchers when its share price soared from $0.20 to $7.96 in two months.
This valued the company at more than $300 million, despite it not announcing any significant news in relation to four gold and copper exploration licences it holds around western NSW. The licences were bought from EJ Resources the previous January.
On July 15 the ASX announced shares in Fifth Element Resources would be suspended from trading while an inquiry was launched into whether it had satisfied the rules for listing.
The ASX is concerned that Fifth Element does not have a "sufficient spread" of shareholders. Under the listing rules a company must have at least 300 shareholders, whereas Fifth Element appeared to have as few as 13.
They include EJ Resources, a $1 company whose ultimate owner is the Hong Kong-based Global Kings Group Limited.
Another of Mr Lo's companies, Diamond Peak Overseas Limited, owns 20 million of the 41 million listed shares.
Mr Lo resigned as Fifth Element chairman and chief executive on November 19 "to pursue other business opportunities", according to a statement to the stock market, but the company told the stock exchange he will "continue to act as a consultant".
Mr Chan resigned as a director of Fifth Element on November 24.
Another EJ Resources director, Noriman Mak who also works as a commercial real estate salesman – declined to discuss the company's uranium exploration plans with Fairfax Media. He referred questions to Mr Lo, who has not responded.
On Tuesday, a spokesman for Mr Roberts said the EJ Resources applications "will go through a further full and independent assessment process, with a higher standard of evidence required than an expression of interest".
"Critically, these applications will be refused if the minister is satisfied that EJ Resources has not met the stringent compliance and conduct conditions set out in the Mining Act."
Correction: An earlier version of this report gave an overstated figure for the percentage increase of the Fifth Element Resources share price.
(20min delay)
