Management Part 6 – projects and performance 2012: My take on...

Management Part 6 – projects and performance

2012:
My take on the year: all the following is IMO only

1: Another tenement EP447 (rights to explore) relinquished, the total from those acquired at listing that have been relinquished is growing. EP447 being the most expensive one, see attached spreadsheet. Loses for the financial year attributed to the relinquishment of tenements $407,000 (2011 $5,109,807)



2: GEP37 & GEP38 signed a government co-funded drilling grant of $120,000, drilling to take place this year.
3: Astron becomes substantial holder
4: Gippsland – maiden coal JORC Resource announced, EL4487 - Maiden Inferred resource of 125MT, takes total JORC Inferred resources to 567MT, sale of tenement still not finalised
5: EL5252 – relinquished
6: Company issued 2 249D’s during the year, both unsuccessful. The first was to replace Mitsui as a director, the second was to replace 3 directors being Mitsui, Flavelle & McCullough. Part of the RM’s statements indicating lack of progress and poor performance as well as the cash balance requiring sale of assets or a capital raising.
7: Shares held in listed company sold to maintain working capital – which is contrary to the company’s rebuttal to the RM’s statement that these assets are held until it requires funds to spend on its stated objectives. As per 4.3.2 in announcement https://www.asx.com.au/asxpdf/20120730/pdf/427ntqfmf4xt0c.pdf
$411,000 sale of assets –786,634 in Astron sold (again, had to go digging around in Astron’s financials for information).
8: SAPELA 146 the company to pursue the granting of its exploration licence for Oil and Gas in the Cooper Basin.
9: Finalised an agreement with General Electric to develop for Australian use GE’s Coal to Liquid (CTL) process.
10: King provides a loan of $250,000 – CTL project
11: Unsuccessful NRI with not much shareholder participation including the directors not participating with only 2,532,649 out of 24,310,411 shares taken up. Part of the funds raised was to repay in full the loan owed by the company to Pandora with the balance for additional working capital. Further, the Underwriting Agreement provided that up to $350,000 of the amount that would have been payable by Pandora to the Company can be automatically set-off against the $350,000 in loans then owed by the Company to Pandora.
https://www.asx.com.au/asxpdf/20121126/pdf/42bg2r0gp4rmpd.pdf

This was discussed on the threads and as I couldn’t understand why King loaned GPP $250,00 but was repaid $350,000 even taking into consideration underwriting fee’s. I also think this was one of the questions I asked of management to no avail, subsequently I lodged an enquiry with the ASX.
To which, the company’s response to the ASX was:
(a) $250,000 loan principal
(b) $66,000 in unpaid directors fees for the year 2012
(c) $16,500 in unpaid directors fees for the year to date in 2013
(d) $17,500 underwriting fees
I did send a further enquiry stating:
In the Rights Issue released to the ASX the company was in fact indicating quite clearly that GPP owed Pandora (King) $350,000 in LOANS and not $250,000, plus the unpaid director and underwriting fees.
I would also like to draw your attention to the Consolidated Annual Report for year ending June 30th 2012
http://www.asx.com.au/asxpdf/20121001/pdf/4292n49wjnvgjh.pdf
Details of Remuneration: Mr King was paid $60,000 under the heading of Cash, Salary and Commissions
and the Consolidated Annual Report for the year ending 30th June 2013
http://www.asx.com.au/asxpdf/20130930/pdf/42jpjq7np2sn5b.pdf
Mr King was again paid $60,000 under the heading of Cash Salary, both these yearly director fee’s were valued at a cost to the group and expensed.
In the Annual Reports for years ending June 30 2012/2013 there was no reference to outstanding fee's owing to Key Management Personal, which is consistent with other ASX listed companies.
What GPP has advised doesn’t align, as the director fee to Mr King of $66,000 being unpaid for year ending 2012, the reported and paid director fee is $60,000 as per the Annual Report.
ASX responded with: As your query relates to the affairs of GPP as they subsisted five years ago, we do not think that there is a risk of materially information about this matter affecting the market for GPP’s securities. Matters of this nature are regulated by the Corporations Act, which is administered and enforced by ASIC.
A report was logged with ASIC in December 2017.

Quarterly Financials & Activities:
31^st Jan – GEP37 &GEP38 drilling postponed to explore drilling funding opportunities
Coal to Liquids Project a rehash of the previous activity reports
Cash at end of quarter: $589,000 Spend $218,000 exploration & $100,000 Admin. Budget for next quarter $225,000
30^th April – EP447 tenement tenure extended by 12 moths,
GEP37 &GEP38 drilling postponed to explore drilling funding opportunities.
Cash at end of quarter: $285,000 Spend $265,000 exploration & $44,000 Admin. Budget for next quarter $250,000
EL5250 – relinquished
30^th July – Cash at end of quarter $319,000 (aided by proceeds of sale of some equity) Spend $147,000 exploration, $81,000 Admin. Budget for next quarter $300,000 (includes $150k for this quarter on admin?)
26^th Oct – Cash at end of quarter: $535,000 (increased with King loan $250k) Spend $361,000 exploration $90,000 admin. Budget for next quarter $325,000
$411,000 sale of assets –786,634 in Astron sold (again, had to go digging around in Astron’s financials for information.


Coal to Liquid announcements:
21^st Aug - Finalised an agreement with General Electric to develop for Australian use GE’s Coal to Liquid (CTL) process.

SAPELA145/146 announcements
29^th April – PEL145, data from ground water drilling/mineral exploration data has been analysed with data showing aged lignite over a 100 sq km.
30^th July – Consultant report on PEL146 commenced.
25^th Sept – received consultants report, the company to pursue the granting of its exploration licence for Oil and Gas in the Cooper Basin.

EP447 – announcements
The last 2 quarterly activity reports from 2011 indicated that work was due to start at the end of 2011, this never occurred.
16^th Jan – GPP replaced UIL farm-in agreement, as well as a 4 month time frame to get Native Titles in order, also relinquish rights to explore for CSG. Work not expected to begin until 2013 at the earliest.
https://www.asx.com.au/asxpdf/20120116/pdf/423s6xtkxjzd1n.pdf
30^th April – Tenement tenure extended by 12 months, work/negotiations as previous


GEP37 & GEP38 – announcements
Drilling campaign was planned for Q1/2012 (from previous activity report)
31^st Jan – Drilling postponed, exploring drilling funding
30^th April – “same as above.”
27^th June – signed a government co-funded drilling grant of $120,000 with desktop studies completed with drilling to take place this year.

30^th Jan - Gippsland drilling completed and maiden JORC resource announced.
https://www.asx.com.au/asxpdf/20120130/pdf/4240f8px5xgsgq.pdf

EL 4877 – announcements
2^nd Feb – Sale deadline extended, AEC replace LFL as the purchaser paying $200k (non-refundable) reducing the $1.6M instalment to $1.4M to be paid in 2 instalments. The first ($600K) following an IPO by AEC (was due no later than31st Jan) but as the IPO didn’t eventuate, due date extended to 15^th March.
15^th Mar – further extension to the $600k instalment, due date extended to 31 March.
4^th April – another extension with company allowing AEC some latitude to finalise funding arrangements
14^th August – Maiden Inferred resource of 125MT
26^th Sept – core drilling as part of resource upgrade


Extraordinary General Meetings
15^th Feb – company issued with a 249D, requisitioning member statement citing GPP had lost 77% of its market value since listing. Trading at 47% discount to its cash and assets. Board member only attending 25% of meetings. Suggesting an in-specie distribution of GPP’s investments in Astron and European Gas. Web site being down and not maintained. Placement of 13% of its stock to Astron at significant discount to the company’s then Net Tangible Assets with no marketing or investor presentations, as some of their key points.
https://www.asx.com.au/asxpdf/20120215/pdf/424crdqvbd57wy.pdf
GPP’s rebuttal statement included:
The company also made an investor presentation to one of Australia’s largest independent stockbroking firms in June 2011 about raising $500,000 in a private placement (but there was no record of it or an announcement to the ASX). Unfortunately, there was insufficient interest (as in the Explanatory Memorandum and Notes Accompanying Notice of EGM 4.28) whereas the placement was made to Astron to provide working capital for the Company.
http://www.asx.com.au/asxpdf/20120215/pdf/424crdqvbd57wy.pdf
Motions were defeated………
30^th June – company issued with another 249D, most of the previous attempt reasons were again cited and rebutted by the current board but this time the RM’s were trying to replace 3 board members.
Motions were defeated again…….

Year ending June 30^th 2012 Financials:
King loans the group $250,000 interest free (12 months) – initial costs associated with the CTL project.
Loses attributed to the relinquishment of tenements $407,000 (2011 $5,109,807)

10^th Sept - Latrobe Valley Twilight Briefing Melbourne
https://www.asx.com.au/asxpdf/20121010/pdf/4298xldg659rdx.pdf
11^th Sept – Geothermal Presentation
https://www.asx.com.au/asxpdf/20121011/pdf/4299mrm080pl4x.pdf
8^th Nov – Chairman’s Address to Shareholders
https://www.asx.com.au/asxpdf/20121108/pdf/42b25989fsgcy9.pdf

26^th Nov – 1:3 Non-Renounceable Issue
The Non-renounceable Rights Issue wasn’t as successful as the company would of hoped for as only 2,532,649 out of 24,310,411 shares were taken up, was was underwritten by Pandora Nominees (King)
http://www.asx.com.au/asxpdf/20121227/pdf/42c5nrvll8pww4.pdf
The proposed use of the funds raised under the entitlement issue:
After payment of the cost and expenses of the Rights Issue, funds raised will be used in each case to the extent that proceeds allow to repay in full the loan owed by the company to Pandora with the balance for additional working capital. Further, the Underwriting Agreement provided that up to $350,000 of the amount that would have been payable by Pandora to the Company for the issue of new shares can be automatically set-off against the $350,000 in loans then owed by the Company to Pandora.

This was discussed on the threads and I couldn’t understand why King loaned GPP $250,00 but was repaid $350,000 even taking into consideration underwriting fee’s. I also think this was one of the questions I asked of management to no avail, subsequently I lodged an enquiry with the ASX.

All the above IMO unless taken directly from announcements

cheers