Michael West of the Sydney Morning Herald raises some very interesting 'red flags' in the matter of Interpid Mines and its rocky relationship with PT Indo Multi Niaga, its Indonesian ‘partner’ in the Tujuh Bukit project in East Java, Indonesia.
In his article, The Horror, the Horror … Company's 'Maker' Could Be a Breaker, he reports that Intrepid CEO, Brad Gordon, “after trying to put out the frantic fires on the shareholder front, flew to Jakarta this week and stitched up a deal with an Indonesian businessman, Suryah Paloh.
"Effectively, Intrepid announced to the ASX that it had allotted 13% of its shares at a discount to a hitherto unknown Indonesian businessman who might be able to buy influence; even to get them back to the negotiating table with its own partners Maya [Ambarsari] and
“Incidentally, Paloh owns a TV station and the president of this TV station is Adrianto Machribie, a non-executive director appointed to the Intrepid board last year.”
West relates that it was a “couple of Aussie lads,” Paul Willis and Sam Garrett, who first discovered the resource, with some clues from old Placer Dome geological data. Needing a local partner, Garrett and Willis struck a deal with Maya and Reza.
“Under Indonesian law, foreigners could not legally own shares in Indonesian companies so their private company, IndoAust, had an arrangement with Maya and Reza's company IMN. IMN held the mining licence, known then as a KP.”
After “stunning drill results” Willis and Garrett, went in search of a joint venture partner to fund the thing. In August, 2007, they found Emperor Mines, which was soon to be renamed Intrepid.
“By January, 2008, the drilling program had gone so well that Gordon told the stock exchange that Tujuh Bukit was a ‘company-maker’. But by March 31, the alliance agreement between IndoAust and the then Emperor Mines had fallen apart, even though it was not disclosed to the ASX at the time.
“A dispute between the parties ensued. Intrepid chairman Colin Jackson said this week he was bound by a confidentiality agreement not to talk about the events of 2008, but, whatever transpired, Willis, Garrett and IndoAust were squeezed out of Tujuh Bukit.”
According to West, “in fact, IndoAust and its workers were forced to evacuate the site in April 2008 in the same dramatic fashion as Intrepid two weeks ago.”
He also states that Intrepid's predecessors were advised by Jakarta law firms, including a Baker &McKenzie affiliate, that they never had a legal entitlement to the resource [and] there is no reason to think that the subsequent 2010 reforms to Indonesia's investment laws had improved their legal position either.”
Asking “was the fact that there was no enforceable title to Tujuh Bukit properly disclosed by Intrepid to its shareholders?”, West concludes: “There is mention of the legal risks in the prospectus for instance to the company's $112 million Canadian share issue 18 months ago, an issue followed by director share sales at far higher prices than now. Whether this disclosure is enough is a moot point, especially for a company that sold its main asset, the Paulsens mine in Western Australia, and relied on this one 'company-maker' to which it never enjoyed formal title.”