Ouch, some pretty full on stuff below, Billabong might be in some serious trouble themselves.
Dear Shareholder
As the Chairman of Vango Mining Ltd (Vango), I wish to clarify certain matters relating to recent public statements made by Dampier Gold Limited (Dampier) and Superior Gold Inc (Billabong).Put simply, Vango has been subject to considerable pressure from Billabong for some time now. The current legal proceedings commenced by Billabong is simply the latest attempt by Billabong to continue to impose pressure on Vango. Vango has comfortably withstood this pressure and will continue to do so. Vango has always been open to working with other organisations (whether they be major investors, financiers or other mining companies) in relation to the development of Vango’s deposits. However, it is of fundamental importance to the Board of Vango to ensure that any such arrangements between Vango and those other organisations are in the best interests of Vango shareholders.It is for this reason that Vango has never entered into any arrangements with Billabong. Frankly, current management of Billabong has only ever put forward proposals to Vango that disadvantage Vango shareholders. Having now failed in their efforts to force Vango to enter into an arrangement with Billabong, the current management of Billabong has decided to commence legal proceedings against Vango. As publicly announced by Vango, such legal proceedings are speculative, without merit and will be vigorously defended.As you may be aware, over 2 years ago Billabong entered into a transaction with Northern Star Resources Limited (Northern Star) to acquire certain tenements to the south of Vango’s tenements. Vango had enjoyed a good working relationship with Northern Star and was looking forward to establishing a similar relationship with Billabong. However, despite Vango’s best efforts in this regard it has become clear to Vango that current Billabong management are only interested in arrangements that would leave Vango with a minority interest in its own tenements. Naturally, the board of Vango has consistently held the view that such arrangements are not in the best interests of Vango shareholders and has therefore declined to enter into them.To put pressure on Vango to enter into unfavourable arrangements, Billabong has from time to time created physical impediments to Vango’s access to its tenements. This has included physically blocking the road leading from the main highway to the southern end of Vango’s tenements. In doing this, Billabong has apparently ignored the fact that Northern Star is the legal owner of the relevant tenements and that Vango has the legal benefit of a road access agreement with Northern Star.Around July 2017, Billabong decided to block a road at a creek crossing by building a wall of dirt and rock dredged from the creek bed for up to 300 meters either side of the creek crossing. This resulted in both environmental damage and Aboriginal heritage damage and was reported to the Department of Mines and Petroleum (DMP) by the local pastoralist (amongst others). A party also dug a trench across the road which runs to the southern part of Vango’s tenements (the trench itself being on Vango’s tenements), which if a vehicle drove into such trench could cause serious injury or death. In September 2018, Billabong and/or its contractors cut an access road 1.5km through Vango tenements without approval from either Vango or the DMP. Vango has reported this to the DMP.Vango understands that Billabong’s ore treatment plant is running low on ore and Billabong’s announcement planned for early this Wednesday morning (Sydney time) might well confirm this. If this is the case, then Billabong’s urgency in attempting to force Vango into an arrangement which is unfavourable to Vango shareholders may be intended to prop up flagging ore volumes at Billabong’s ore treatment plant. The register maintained by DMIRS shows that Billabong is not the registered holder of the tenements the subject of the Billabong acquisition from Northern Star. It is possible that over 2 years following the announcement of the acquisition Billabong has not yet paid the entire purchase price to Northern Star. Billabong’s current cost of operations appears to be in excess of the revenue derived from those operations leading the Board of Vango to consider whether the aggressive approach adopted by Billabong is seen as being necessary to secure rights to Vango’s ore and provide a path forward for Billabong to repay the remaining purchase price to Northern Star.Vango remains open to considering arrangements with a range of organisations, however such arrangements can only be on terms which are favourable to Vango shareholders. Clearly, this includes the Board of Vango being confident that the other organisation has management that Vango can work with.Vango will continue to work towards the development of its deposits and generating increased value for shareholders.Ouch
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