News

August 28, 2008

It’s Lawyers At Ten Paces As Anglo Pacific And North Australian Diamonds Square Up In The Courts

By Our Man in Oz

No investor likes to be watered down by a share placement. But not many react by suing the company in which they have a major stake. In a curious sort of way it’s a bit like suing yourself. That, sadly, is what’s happening as London-based Anglo Pacific Group squares off with North Australian Diamonds in the Supreme Court of Western Australia (WA). The dispute is over a plan by North Australian to complete a A$6 million capital raising. The mooted new funds are earmarked for additional drilling and feasibility studies on the once prolific Merlin diamond mine in the Northern Territory.

North Australian’s management says it must have the money “to ensure the viability of the Merlin project”. Anglo Pacific, which owns 13 per cent of North Australian, is far from happy, as shown by the fact that it started Supreme Court action against the share issue last Sunday – which must have come as a rude shock to sleepy lawyers, not to mention the judge. But it’s not the raising that Anglo Pacific doesn’t like, and it’s not Merlin, it’s the price the new shares are being offered at.

The...