BRISBANE, Australia, May 4, 2016 /PRNewswire/ --
The letter was as follows:
DAWNEY & CO PTY LTD
A.C.N. 168 708 503
3 May 2016
RE: HILLGROVE RESOURCES
Fellow Remaining Shareholders,
You may recall my attendance at our Annual General Meeting (AGM) last year where I repeatedly asked for cash flow figures and for Board and financier cash flow models to be released to the market so we could make an informed decision about the viability of Kanmantoo. This was refused.
By background, I am a stockbroker and private investor. Through personal entities, I have been a shareholder of Hillgrove Resources since 2013. Like all of you, I have watched my investment almost disappear. Other shareholders have jumped ship, driving the share price to new lows. There are many reasons our shares now trade at concerning levels. The most critical being that the Board failed to meet key cash flow and operational targets and mistimed and underestimated capital expenditure. These mistakes are unacceptable because frankly, the Directors only had one job to do: oversee the successful operation of our Kanmantoo project. Hillgrove is not a diversified miner stretched across jurisdictions, currencies and commodities where a Board may be forgiven for neglecting a lesser asset. Now, as a direct result of mismanagement, our company is in dire straits and we are paying the price.
The 31 March 2016 announcement to change the mining plan AGAIN is the final straw. At the time of writing, our company's market capitalisation is a miserable $8 million. Putting this in perspective, $10 million was raised through the 3 for 11 rights issue in May last year. At that time, we were told considerable value remains in the project as is (with exploration upside) and the primary focus was "returning value to shareholders". The change of mine plan announcement is virtually identical, but with further substantial delays in cash flow available for distribution. Hillgrove's auditor Deloitte Touche Tohmatsu made this disturbing comment about our company in their FY15 report: "These conditions, along with other matters as set forth in Note 1(a)(i), indicate the existence of material uncertainties which cast significant doubt about the ability of the company and the consolidated entity to continue as going concerns and whether they will realise their assets and discharge their liabilities in the normal course of business".
Thoughts to consider:
Hillgrove now represents a small part of my investment portfolio and I have mentally prepared for it to go to zero. Nevertheless, while we still have a fighting chance, I am committed to pursuing the best possible outcome for shareholders. Given the remuneration report was voted down at the 28 May 2015 AGM, it is likely that the Board will be spilled at the upcoming AGM on 26 May 2016. As we were refused important financial information last year, my intention is to become a Director to obtain this and be briefed on all issues facing our company. I am a stark supporter of shareholder interests and value preservation and will do everything I can to avoid total loss. If you are as frustrated as I am, I ask that you vote as follows:
I welcome all enquiries.
Regards,
Mitch Dawney
Managing Director
Dawney & Co Pty Ltd
mdd@dawneyco.com.au
Twitter: @MitchDawney