Ladies and Gentlemen,
Today's meeting has been called at the behest of a small group of shareholders who want to remove your current directors, and install a new slate of their choosing. As I have mentioned previously, at no time have the shareholders concerned sought to have any discussion with the board. It is interesting to note that there has been a significant lift in the average volume of our shares traded since these shareholders signalled their intentions, with most buyers coming from Indonesia, Singapore or Hong Kong, countries where Intrepid previously had very few shareholders. There are now well over 120 million shares - in excess of 20% of the Company's stock - held by south-east Asian shareholders. Many of the shares are held through nominees, a number of whom have been very reluctant to reveal the beneficial holders as they are required to do. The Company has been in discussion with the regulator over this lack of transparency, and will continue to seek clarification on the entities driving this activity.
As I said in my letter to shareholders in the Notice of Meeting, the decision you face today is a simple one - which of these slates is best placed to lead your company forward in the situation in which we now find ourselves.
While you will have seen a lot of arguments and allegations put on the issue since, the key questions you will need to consider remain the same:
- Who has the better strategy?
- Who has the better skill set?
- Who has the greater credibility?
I have no wish to prolong today's meeting by repeating those arguments again, but I would like to reinforce three important messages.
- The key difference in strategy between your board and the Quantum group is that we seek to balance a commercially negotiated resolution with prudent legal action to preserve your legal entitlements. We do so knowing that our legal cases are strong, and provide the Company with a solid basis for negotiating an equitable resolution. Quantum, on the other hand, appears to believe (without any evidence) that our legal position is uniformly weak, and our cases only serve to irritate our Indonesian opponents. Clearly we cannot publically release our legal advice without signalling our arguments to our opponents, and that would not be in your interests. However I can categorically assure you that a strategy that abandons the legal option would severely weaken Intrepid's negotiating position in this dispute.
- The key difference in skill and experience between the two slates is that your current board actually know the business of metalliferous mining, and Indonesia from the inside. Adrianto Machribie is the only Indonesian national on either slate, all of the current board have senior management experience in metalliferous mining companies, two of them in Indonesia. Quantum's nominees largely have a finance industry background, with limited mining experience.
- Quantum has sought your vote largely on the basis that the existing board lacks credibility, given that it has committed $100M to the Tujuh Bukit project without holding the mining licences, and has presided over a substantial fall in the share price. Your directors acknowledge the fall in the share price, and say it is a direct result of breach of contract by our partner, in selling shares it had contracted to deliver to Intrepid, to other parties. On the other matter, it is demonstrable that $100M is not an unreasonable spend for a project of this size, at this stage of development. The only basis for this criticism would be if the legal base of the Alliance Agreement with the original partner, PT IMN, were not sound, and as I have said before, it is. And if my assurance is not enough, the due diligence conducted on behalf of underwriters prior to our last equity raising nearly 30 months ago, focussed heavily on the status of that agreement, and the underwriters were satisfied to proceed with their placement. Quantum of course have one serious question to answer, and that is why, after negotiating with our opponents for over a year, they come to this meeting with no defined strategy, and an expectation that resolution will take another nine months - having offered no explanation of why they were engaged in discussion with our antagonists even before Quantum had any interest in Intrepid.
Ladies and gentlemen, your votes today will have a significant impact on the way we seek to resolve this dispute, and prospects of an equitable and transparent resolution. Should you choose to return the current directors, we will continue to work on your behalf to resolve this dispute so that the Tujuh Bukit project, which holds such promise, can deliver for all its stakeholders.
|Ian McMaster AM|
ABN: 11 060 156 452