Junior resources player in desperate 11th hour play to save itself

TEETERING on the brink of failure, a Brisbane junior resources player has made a desperate 11th hour play to save itself by acquiring an aspiring gold and copper miner.

LWP Technologies announced conditional plans this week to buy Traprock Mining.

TEETERING on the brink of failure, a Brisbane junior resources player has made a desperate 11th hour play to save itself by acquiring an aspiring gold and copper miner.

LWP Technologies announced conditional plans this week to buy another Brisbane-based minnow, Traprock Mining, in an all-scrip deal which includes an initial tranche of 75 million fully-paid shares and another 75 million performance rights.

As part of the scheme, LWP will oversee a $4.5 million capital raising without underwriters and seek another $500,000 from sophisticated investors.

It’s a dramatic gambit for LWP, which has been unable to commercialise its fracking technology since listing in 2006 and is now burdened with huge losses, almost no cash and a stock suspended for the past year.

In case that wasn’t enough, ASIC has revealed that it’s investigating the company over alleged insider trading, undisclosed related party transactions, share price manipulation, financial reporting irregularities and other issues prior to mid-2017.

LWP chairman Dan Lanskey, who says the board has “co-operated fully” with ASIC, told City Beat yesterday that the proposed acquisition would provide a ray of hope for long-suffering investors.

“If we are able to recover some value for current shareholders, there’s a win-win situation,’’ Lanskey said.

“If this company goes into shutdown, what’s in it for them? Nothing. It’s gone. I hope we can turn this around.’’

The deal must still be approved by LWP shareholders late next month but Lanskey said initial feedback had already been “very upbeat and positive’’.

MINING COMEBACK

Traprock was launched three years ago by mining industry veteran Tony Fawdon with one of his longtime associates, David Jelley.

In a 45-year career in the sector, Fawdon has founded several listed explorers, including Strike Mining and Diatreme Resources, and served as a director of the old Queensland Mining Council.

His latest venture is focused on four copper gold projects, including its flagship Mount Chalmers site about 25km outside of Rockhampton.

Mining started there in 1890 and continued sporadically until 1982. It’s been mothballed ever since and the last owner, Affinis, went bust four years ago.

Traprock also has three other projects in relatively unexplored areas west of Warwick and Stanthorpe.

With the company in cash-burn mode and generating no revenue, Fawdon and about 30 investors have tipped in about $1.8 million to keep it afloat.

They announced plans to raise $6.5 million in an IPO in 2016 but it ran aground the following year as market conditions soured and a prospective backer got cold feet.

Fawdon, a 74-year-old Pom, now says there is “better certainty’’ by signing on with LWP thanks to its existing shareholder base.

He hopes to start drilling at Mount Chalmers before Christmas. He expects the work to take about two years, paving the way for production to kick off after that.

EASING THE TENSION

It has to be a tad awkward for banking big shots to preside over AGMs right now as the Royal Commission continues to expose widespread and outrageous wrongdoing across the sector.

So Suncorp chairman Ziggy Switkowski deployed a bit of humour to defuse the tension at the annual meeting yesterday in Brisbane.

As he was introducing company execs to the crowd, he came to insurance head Gary Dransfield.

Switkowski couldn’t help noting that Dransfield much preferred attending the AGM than getting grilled in the witness box. Boom tish!

WINNING BREWS

More than 250 craft beer industry players gathered in Brisbane last night to honour their best practitioners.

The second annual Beeries awards saw Ballistic Brewing’s Lachlan Crothers take home the gong for best brewer.

The gang at Revel Brewing won recognition as best new brewery opened since January last year. We’ll hoist a schooner to that!