Jun 10, 2010 - Australian Zircon is now trying to block transfer of the zircon and titanium tenement until it has clarified its stake, which was established with a farm-in deal in 2004.
At a creditors' meeting in Adelaide yesterday, Pitcher Partners' deed administrator Bryan Hughes said the tenement's purchaser, Astron, had "launched a missile" at Australian Zircon by trying to have the farm-in agreement for the WIM150 project terminated.
The project near Horsham has 10 times the zircon content estimated at its Mindarie project, 150km east of Adelaide.
Under the agreement, Australian Zircon had the right to earn up to an 86 per cent interest in the Victorian deposit by developing the project to bankable feasibility stage.
"That farm-in arrangement has been a very constructive, positive relationship and has worked very well for both companies (Austpac and Australia Zircon)," Mr Hughes said.
"Australian Zircon always considered that project of value and has spent millions of dollars . . . in the development of that.
"(Astron) have been rather opportunistic, in my view, and has seen a valuable project in . . . WIM150 and has seen an opportunity where it may be able to gain it for less than fair consideration."
Legal action surrounding the project may be concerning for controlling shareholder DCM Decometal, Mr Hughes told creditors. They should be mindful of DCM's financial burden and that a major asset was "at risk".
"If I was sitting in their (DCM's) position, I would be wondering if I was getting what I had paid for," he said.
DCM came to Australian Zircon's rescue in January last year with a $40 million debt-for-equity swap and capital injection. It now holds about 72 per cent of Australian Zircon's issued shares.
Mr Hughes also told creditors a recently announced agreement between DCM and Orient Zirconic was non-binding, and few details were yet known to the company.
A public announcement was made by Orient Zirconic in China that it had signed a letter of intent with DCM to purchase its zircon assets for up to $40 million.
At a creditors' meeting in Adelaide yesterday, Pitcher Partners' deed administrator Bryan Hughes said the tenement's purchaser, Astron, had "launched a missile" at Australian Zircon by trying to have the farm-in agreement for the WIM150 project terminated.
The project near Horsham has 10 times the zircon content estimated at its Mindarie project, 150km east of Adelaide.
Under the agreement, Australian Zircon had the right to earn up to an 86 per cent interest in the Victorian deposit by developing the project to bankable feasibility stage.
"That farm-in arrangement has been a very constructive, positive relationship and has worked very well for both companies (Austpac and Australia Zircon)," Mr Hughes said.
"Australian Zircon always considered that project of value and has spent millions of dollars . . . in the development of that.
"(Astron) have been rather opportunistic, in my view, and has seen a valuable project in . . . WIM150 and has seen an opportunity where it may be able to gain it for less than fair consideration."
Legal action surrounding the project may be concerning for controlling shareholder DCM Decometal, Mr Hughes told creditors. They should be mindful of DCM's financial burden and that a major asset was "at risk".
"If I was sitting in their (DCM's) position, I would be wondering if I was getting what I had paid for," he said.
DCM came to Australian Zircon's rescue in January last year with a $40 million debt-for-equity swap and capital injection. It now holds about 72 per cent of Australian Zircon's issued shares.
Mr Hughes also told creditors a recently announced agreement between DCM and Orient Zirconic was non-binding, and few details were yet known to the company.
A public announcement was made by Orient Zirconic in China that it had signed a letter of intent with DCM to purchase its zircon assets for up to $40 million.
