Nathan Tinkler says he will sue for shareholder oppression over Austral share sale

Austral Resources was to be Nathan Tinkler’s corporate comeback but the former billionaire says he’ll sue ‘for shareholder oppression’, having sold his shares.

Nathan Tinkler is threatening to sue a former business partner. Picture: Britta Campion / The Australian

One-time mining billionaire Nathan Tinkler has reached for the lawyers in a dispute with another former business partner, threatening to sue new copper float Austral Resources and its executive director over claims he was pushed out of the centrepiece of his planned corporate comeback.

Austral will begin trading on the ASX on Wednesday after raising $30m at 20c a share, floating its ownership of Queensland’s Lady Annie copper mine with the commodity price still hovering just below $US10,000 a tonne.

But a looming lawsuit from Mr Tinkler might spoil the celebrations, with the former billionaire planning to launch action in the NSW Supreme Court against Austral and executive director Dan Jauncey this week over claims he was pushed out of the Queensland copper miner when Lady Annie hit financial problems in mid-2020.

Mr Tinkler wants to reclaim his half-stake in Austral – worth $89m on the market at the 20c issue price.

The pair bought the copper mine in July 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.

Company documents filed with the Australian Securities & Investments Commission show Mr Tinkler’s Singapore-based Bentley Resources took on about $15m in debt from a private company associated with retail billionaire Gerry Harvey to close the deal.

Documents show companies associated with Mr Tinkler – who was banned from acting as a director at the time of the acquisition – controlled 51 per cent of Lady Annie, with Mr Jauncey holding the rest.

Despite a successful restarting of the mothballed mine, Lady Annie rapidly fell into financial trouble as copper prices crashed amid the first wave of coronavirus outbreak in early 2020, with local media reports suggesting its operations were teetering on the edge of insolvency.

Mr Tinkler told The Australian that the threat had forced him to sell his shares, accusing Mr Jauncey of reneging on a deal to fund Lady Annie’s operations until a public float could be organised.

“I put 18 months into buying this asset. In true entrepreneurial style, I went out and got the investment, I brought 80 per cent of the money to it, I got the debt off Gerry Harvey. Dan was to bring the equity,” he said.

“He knew I didn’t have any money. I was the one that pulled the deal together and then he just refused to fund it. We were getting letters of demand every week and I was left with no option but to let him buy me out.”

Mr Tinkler said he planned to sue for “shareholder oppression” to reclaim his half-stake in Austral – which will be worth $89m on the market at its 20c issue price.

Mr Jauncey confirmed on Tuesday that he had received legal threats from his former business partner, but rejected the accusations, saying Mr Tinkler was happy to relinquish his shareholding as low copper prices pushed the mine to the brink.

“We entered into a commercial arrangement that we both agreed on well over 12 months ago. It was all done legitimately, signed off by both parties and there was willing acceptance,” he said.

“And that was at a time when I’d provided all the security, and that thing could have gone out the back door.”

Mr Jauncey said the legal threats from Mr Tinkler had “absolutely no merit”.

“The first I’ve heard of any unsettlement was virtually over the last week. And, ironically, it happens just as we float. It has absolutely no merit.”

With copper prices now hovering around $US10,000 a tonne, its future now looks far bright as Austral brings a second mining area to production.

Austral’s prospectus shows the mine needs a copper price of about $US7300 a tonne to stay viable.

While Austral is currently producing relatively low levels of copper as it looks to open up new mining areas, Mr Jauncey said the company expected to be ramping up to production levels of about 15,000 tonnes a year.

“The fact that we had institutional banks, international investment, and a really large spread of investors come in, really said to us that it’s an exciting time to be in copper,” he said.

“I guess that’s one of the differences with us to what is just recently on the market. We are an operational copper mine. We are producing copper today.”