Queenslander Tom Peever was contacting Elution’s investors less and less before ATO hit him with $200m tax case: shareholders

Early investors in Elution, a mining company launched by Queenslander Tom Peever who is facing a $200m tax bill, became increasingly worried about their money and turned to his father for help, emails seen by The Australian show.

Tom Peever’s Elution Metals secured an agreement with CuDeco’s Rocklands processing plant, before it was liquidated.

As two Queensland newlyweds splashed $27m on their four luxury properties, the shareholders who backed their start-up were being told less and less about the enterprise that the tax office now alleges to be a sham business.

Tom Peever and his wife Kirsten bought a Mercedes Benz worth $178,700 and shares worth $146,824 around this time, between November 2021 and November 2022, according to the ATO. Newly disclosed email threads allege a small group of investors in Mr Peever’s once budding mining start-up Elution were getting increasingly little information about the business and its financial accounts as it hit legal hurdles.

Mr and Mrs Peever have since had their assets frozen, facing claims they owe the tax office $200m and allegations they carried out a “false” mining operation to fraudulently claim research and development and GST refunds.

Tom (pictured) and Kirsten Peever allegedly owe the Australian Taxation Office more than $200m after their assets were frozen.

The case will return to court in July.

The shareholders grew so concerned, they wrote a letter to Mr Peever’s father George, who was also a shareholder at one point, pleading for him to intervene in April last year.

“A group of very concerned Elution shareholders is reaching out to you, personally, for direct support to resolve important matters of governance,” the letter read.

“During the last 12 months, shareholders have requested information about Elution from Tom through various mediums including email, phone calls, and messages. None of these requests have been fulfilled.

“This has now become an unreasonable scenario and the shareholder group are extremely concerned, and disappointed, with Tom’s actions.”

Some of the investors counted Mr Peever as a close friend, according to the letter, but said they were being “treated with contempt”.

The Australian attempted to call and email Mr Peever, but he did not respond.

They said their main concerns related to a “lack of transparency in the company’s financial dealings and financial position”, lack of clarity about R&D refunds and concerns over the “apparent registering of multiple companies that may or may not be associated with Elution”.

CuDeco’s Rocklands processing plant.

“Combined with significant real estate purchases over the same time frame, it is not clear that Tom’s obligations to Elution shareholders are being observed,” they said.

This letter, seen by The Australian, noted Tom failed to respond to an earlier note sent three months earlier in January, and that the shareholders were concerned about his welfare.

Elution had secured a deal with former market darling CuDeco, which ran the Rocklands copper mine in rural Queensland at Cloncurry before it fell into liquidation, to procure high-grade cobalt, copper and gold concentrate out of tailings.

CuDeco granted Elution a mining lease mortgage over its tailings storage facility in February 2019. But CuDeco, a once promising operation helmed by Wayne McCrae, suspended operations in August 2018.

Receivers and administrators were appointed in July 2019. Liquidators arrived in April 2020 and sold the mine and its tenements for $29.6m.

Mr Peever asked the Queensland Supreme Court for “preliminary disclosure” from the receivers about the sale process and foreshadowed possible litigation in 2022.

Elution refused to remove its registered mortgage over the CuDeco tailings facility, and the liquidator launched proceedings in the Federal Court. The matter was settled and CuDeco agreed to pay Mr Peever’s company $535,000 in 2020.

Tom and Kirsten Peever proposal.

Mr Peever, updating shareholders about the legal action in December 2020, threatened to take a “scorched earth” approach to ensure Elution got what it wanted.

“I also made sure the receivers and the Chinese secured creditor paid the highest amount possible in order for Elution to release the mortgage and if I couldn’t achieve an outcome that was in Elution’s best interest it was made very clear… Elution would not release the mortgage, block the sale, take a scorched earth approach and appoint its own court ordered receiver to resell the mine with Mitsui,” he said at the time.

“They obviously did not want this to occur and agreed to the terms as outlined above.”

Mr Peever told investors Elution booked its first net profit of $5.4m in the 2021 financial year, but the figure was “subject to the approval of the R&D offset which could change Elution’s result”.

He said revenue was $10.935m, expenses $7.325m and earnings before interest and tax $2.07m. Mr Peever said total shareholder equity was about $39m.

In the 2022 financial year, revenue of $6.86m was achieved “wholly from investment earnings”, Mr Peever told investors in November of that year upon releasing “draft” financials. Expenses amounted to $1.49m which was a “combination of corporate overheads and metallurgical test work expenses” and the company booked a net profit of $4.03m.

Tom and Kirsten Peever (pictured) allegedly owe the Australian Taxation Office more than $200m after their assets were frozen.

Shareholder equity as at June 30, 2022 was $56m, and cash including investments was $24m.

Mr Peever in February 2019 was telling investors he was trying to raise a further $250,000, according to e-mails seen by The Australian. This was to pay for test work at the CuDeco site.

While Mr Peever said Elution completed its due diligence and was confident the processing of the tailings would be economically viable in October of that year, one of the receivers, Ian Francis, would later reach a different opinion.

He said the tailings storage facility was “subject to major environmental issues and subject to significant corresponding liabilities when we were appointed”.

And in December 2019, Mr Peever declared it had been a “big year” for Elution which had acquired Mt Garnet – a now abandoned copper, silver and zinc mine in Queensland.

Other emails from Mr Peever, that are not dated, tell investors about CuDeco’s liquidation and flag legal action.

“Elution has progressed development of both assets as quickly as possible however we have had some uncontrollable events which include a 1 in 100 year flooding event in Cloncurry in 2019 that delayed drilling and sampling by 6 months, COVID 19 and now the disclaiming of the mining leases as Rocklands,” he said.

“If I can bring forward the share buyback opportunity I will, however, I need to preserve Elution’s value for all shareholders and provide those of you wanting to exit with the best outcome.”

In other notes, he acknowledged that Elution is “up against it” and insisted “Elution and its legal team (have) the situation under control” regarding separate legal cases in the Queensland Supreme Court and Federal Court.

In July 2019, Mr Peever told investors they may be eligible to claim a 20 per cent early stage innovation tax offset on their investments in Elution.

Originally published as Queenslander Tom Peever was contacting Elution’s investors less and less before ATO hit him with $200m tax case: shareholders