Zeehan Zinc Now Controlled By Chinese Who Have Switched Metal Target
Charles Wyatt
minesite.com
A little bit of good news to end off 2008 … and we certainly all need some. AIM listd Zeehan Zinc has received the sum of just over £3 million from the Chinese company Creat Group, in accordance with a share subscription agreed between the two companies signed on November 10th. At the time it was agreed that this payment would be made within 25 days of the Zeehan Zinc AGM and the new shares would be issued as soon as the money was received. Well the AGM took place on November 14th so the money was actually received 47 days later which must have caused some sweating among Zeehan shareholders over Christmas. The hope that they could hang onto at the time was that Creat Group, represented on the company board by Yuewhen Zheng as chairman and non-executive director and Xiaojian Ren as managing director and acting chief executive, had been a bit slow earlier in the year in paying up for its convertible loan agreement as a result of which it already had a holding of 6.2 per cent in Zeehan.
Now Creat Group is in the driving seat good and proper with a shareholding of 70 per cent and it is going to direct over £2 million of this money into an exploration plan and budget focusing on nickel and the rest into meeting expenses and outstanding liabilities. Judging from the qualifications applied by its auditors to the accounts for the year to end June 2008 this will merit a bit of discussion. The auditors claim they were not provided with information to support the directors' decision to impair mine properties and plant and equipment by A$11,706,998 and were unable to satisfy themselves as to the recoverable amount calculated by the directors for mine properties and plant & equipment as at 30 June 2008. That will now be a matter between the auditors and Creat Group and everyone knows who is paying the bills.
The other interesting thing about Zeehan Zinc is that it now appears to be zinc no longer. When Minesite last wrote about the company back in the summer zinc was still the target metal, though the two main polymetallic deposits near Zeehan on the west coast of Tasmania were also prospective for silver and lead. Comstock was the biggest with 4.7 million tonnes grading 5.7% zinc in the inferred category and the early plan was to truck the ore to a local flotation plant for concentration according to Shane Bartel who was operating officer at the time.
He has since been displaced by the Chinese and this adds to the difficulty of making contact over the Christmas/New Year holidays. Unlike the puff-puff brigade Minesite writers like to talk to leading executives to get a proper background to operations in each company. This has not been possible, but every effort will be made in the New Year to make contact as there are still a number of UK minority shareholders as well as Aussies. By that time, hopefully, the company website will have been brought up to date.
Mention was made in the last article that Zeehan did have a nickel exploration programme in hand, stimulated by the Avebury nickel mine which was near Comsstock. Allegiance Mining, owner of Avebury, reckoned that it had potential to become a new nickel province so the fact that Zeehan has several hundred square kilometres of tenements in the area puts it in an interesting position. The Chinese have clearly been persuaded and have now put real money down to start work on it.
Existing shareholders may niggle that they have been heavily diluted, but they should bear in mind that the first tranche of Creat Group’s shareholding was acquired at 15p per share compared with 1p for the recent one. Anyway the company is still alive; it is in good hands; and if the Chinese use Zeehan for some acquisitions they could be in for an exciting time. First they will have to get used to a new name and a new metal target. |
