Austral Austral down after legal threat from former billionaire Nathan Tinkler

Austral Resources shares opened down 20% on the copper miner’s first day of trading, as the company confirmed it was the target of legal threats from Nathan Tinkler.

Nathan Tinkler is threatening to sue Austral Resources. Picture: Hollie Adams

Austral Resources shares opened down 20 per cent on the copper miner’s first day of trading, as the company confirmed it was the target of legal threats by former billionaire Nathan Tinkler.

Austral shares were down 4c, or 20 per cent shortly after its shares began trading on Wednesday, after The Australian reported on looming threats of legal action by Mr Tinkler, a shareholder in the company until he sold out in mid-2020 as copper prices fell.

The company was down 2.5c to 17.5c, or 12.5 per cent at market close.

In a statement to the exchange, Austral confirmed that both the company and executive director Dan Jauncey had received letters threatening legal action over Mr Tinkler’s claims he was pushed out of the company when its Lady Annie copper mine in Queensland hit financial problems in mid-2020.

“On receipt of the Nathan Tinkler correspondence, Austral and the Jauncey Interests have responded, through their solicitors, refuting all claims made in the Nathan Tinkler correspondence,” the company said.

Austral confirmed that no legal action against the company had been launched, and told shareholders it would defend its position in court if it were.

“Austral advises that without sufficient information or documentation to support the purported threatened legal action, it is premature to form a definitive view on the substance of these claims,” the company said.

“However, it is the current position of the Austral directors that the Nathan Tinkler correspondence (and related media coverage) fail to disclose any substantive basis on which Nathan Tinkler could reasonably commence proceedings against Austral.”

Mr Tinkler told The Australian this week he was planning to sue to recover the 51 per cent share in the company he held before agreeing to sell his shares in mid-2020, claiming the basis of his action would be “shareholder oppression”.

The former coal magnate said Mr Jauncey had reneged on a deal to fund operations of Lady Annie until a float of the company could be organised, and he had sold up in the face of a threat the company could be put into administration for lack of funds.

Austral’s prospectus shows the mine needs a copper price of about $US7300 a tonne to stay viable. Copper is currently worth about $US9800 a tonne and the company is nearing the opening of a new mining area on its tenements it says will allow the production of about 15,000 tonnes of copper a year.

Companies associated with Mr Tinkler and Mr Jauncey bought the copper mine in 2019 from Hong Kong-listed CST – once a vehicle for mining entrepreneur Owen Hegarty – paying $1 for the mine’s holding companies and taking on $22.7m worth of debt owed by the operation.

Mr Tinkler’s part of the deal was partly bankrolled by retail king Gerry Harvey.

But while the copper price may give Lady Annie a new lease of life, the mine – sits just north of Mount Isa in Queensland’s richest base metals district – has a long-troubled history.

It was ­developed by Perth-based CopperCo, which opened a heap-leaching operation in October 2007 before collapsing only a year later.

Tony Sage’s Cape Lambert Resources bought CopperCo’s assets for $100m in 2009, and flipped Lady Annie to CST for $135m within a year.

But it struggled to make money under CST’s ownership. By the time CST mothballed Lady Annie CST’s Australian arm $262.2m to its Hong Kong parent.

Originally published as Austral Austral down after legal threat from former billionaire Nathan Tinkler