ASIC slaps fine on Gold Mountain for not retracting news fast enough; shares jump 20pc
ASIC has slapped a $33,000 fine on Gold Mountain for making statements about a project that didn’t follow the rules.
In a move that should be causing miners to shake in their boots, the fine came after an ASIC investigation into statements made by Gold Mountain (ASX:GMN) July 27, 2017 — then retracted them in August 2017.
ASIC alleges the statements did not follow the JORC code and should have been pulled on the day they were made.
Miners must abide by a reporting code managed by the Australasian Joint Ore Reserves Committee (JORC). The code sets a standard to help assess and compare forward-looking statements such as production targets and revenue forecasts.
In July last year, Gold Mountain told the market that :
The statements were not JORC compliant because they weren’t based on the work of a qualified person.
At the time, Gold Mountain said the statements were made in a note by the company’s PR agent with the authorisation of the company and sent to shareholders, and eventually found its way onto ASX gossip site Hot Copper.
“Listed companies must immediately notify the ASX of information that a reasonable person would expect to have a material effect on the price or value of the company’s securities,” said ASIC commissioner Cathie Armour.
“This obligation also applies to correcting misinformation of which the company is aware and publicly available.”
Because Gold Mountain complied with the infringement notice, which also restricts the company from raising money from retail investors without a full prospectus until July 2019, it hasn’t breached the Corporations Act.
Gold Mountain has not reported any customer receipts in its cashflow statements over the past year but does have $3 million in the bank.
It is however “aggressively expanding” an exploration program at its flagship Crown Ridge project in PNG and expects to spend $1.3 million this quarter.
Stockhead is seeking comment from Gold Mountain.
The company’s shares gained 20 pe cent to 10.5c on news that its maiden drill hole at Mongai Creek, to the north of Crown Ridge, has confirmed there are characteristics associated with a porphyry copper-gold system.
The stock closed the day at 10c.