Discovery Metals is at loggerheads with the Australian Stock Exchange (ASX) over the recent spike in the company share price as there are worries it could have been in contravention of the listing rules.
The stock exchange wrote to the owners of Boseto mine in Botswana that it has noted a change in the price of the ‘entity’s securities from a low of $0.026 to a high of $0.036 on Thursday, 3 July 2014 and an increase in the trading volume of the entity’s securities’.
In a letter to DML, Adviser, Listings Compliance, Shannon Hong at ASX asked, “Is the Entity aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities?”
“No. The company is not aware of any information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the Company,” responded Discovery Metals’ Company Secretary, Paul Frederiks.
“Further, in responding to this question, the company is not aware of any information that its earnings for the 12 month period ending on 30 June 2014 would come as a surprise to the market”.
Discovery Metals argued the price change in the securities of the
company maybe because of the announcement in its Debt Re-Profile announcement on Monday, 19 May 2014; and the Company’s Appointment of a Corporate Advisor in respect of Proposed Recapitalisation announcement of Thursday, 26 June 2014. The company named Foster Stockbroking Pty Ltd as Corporate Advisor in respect of a proposed equity recapitalization following the debt re-profiling by lenders.
“The company is in compliance with the ASX listing rules and, in
particular, listing rule 3.1.”
The Australian bourse also wanted DML, when responding to this question, to consider in particular whether it is aware of any information that its earnings for the 12 month period ending on 30 June 2014: are likely to differ materially (downwards or upwards) from any earnings guidance it has given for the period; or if the Entity has not given any earnings guidance for the period, are otherwise likely to come as a surprise to the market (by reference to analyst forecasts for the period or, if the Entity is not covered by analysts, its earnings for the prior corresponding period)? The exchange equally wanted to know whether DML is relying on Listing Rule 3.1A not to announce that information under Listing Rule 3.1?
“Please note that the recent trading in the Entity’s securities would suggest to ASX that such information may have ceased to be confidential and therefore the Entity may no longer be able to rely on Listing Rule 3.1A. Accordingly, if the answer to this question is “yes”, you need to contact us immediately to discuss the situation,” asked ASX.
The ASX Listing Rule 3.1 requires a listed entity to give ASX immediately any information that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. Exceptions to this requirement are set out in
Listing Rule 3.1A.