Capital Mining in brouhaha with ASX over consultancy fees
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Besieged explorer Capital Mining has fired back at queries raised by the ASX, saying some questions were not within the Exchange’s scope enquiry.
Perth-based Capital (ASX:CMY), which has been suspended from trade since August 14, has been under the ASX’s spotlight over the remuneration of directors and consultants.
Capital Mining spent only $175,000 on exploration while a massive $637,000 was paid for administration and corporate costs, according to its June quarter report.
On September 6, the ASX asked Capital Mining for a breakdown of the payments, in particular payments made to venture capitalist Chapmans.
Chapmans (ASX:CHP) had been planning to invest in Capital Mining’s new venture, Capital Cannabis while also providing two directors, Anthony Dunlop and Peter Dykes.
The ASX quizzed Capital Mining over conflicting payments to Mr Dykes and Mr Dunlop since they were directors of Capital Mining and Chapmans.
The ASX asked Capital Mining who approved a consulting agreement with Chapmans and what steps were taken to ensure it was appropriate and at arm’s length.
Capital Mining replied: “This is a matter in relation to the internal processes of Capital Mining and does not consider that this request is within the scope of ASX’s enquiry”.
Capital went on to say that director Peter Torney approved the consultancy agreement which he considered to be appropriate based on 14 years of experience in the financial services industry.
For a full copy of Capital Mining’s response to the ASX, click here.
The ASX had requested a response from Capital Mining by September 11, however the response was provided almost three weeks after the deadline on September 29.
Three days before its response to ASX, Capital Mining announced it had terminated its dealings with Chapmans and made a number of board changes.
Mr Torney terminated his consultancy agreement with the company but stayed on as a non-executive director.
Mr Dykes also ended his consultancy agreement and directorship. Mr Dunlop stayed on as a non-executive director.
Meanwhile, Capital Mining appointed Robert Crossman as independent non-executive chairman. M Crossman is managing director of corporate advisory firm Corpac Partners. Raymond Muskett has also joined the company as General Manager of Exploration.
Capital Mining was a gold and rare earths explorer before entering the realm of medical marijuana in 2015.
Since then it has morphed back into a junior explorer, holding cobalt and lithium assets in Western Australia and the Republic of Ireland, plus gold and base metals projects in New South Wales.
Capital Mining remains suspended from trading pending an announcement regarding the future of Capital Cannabis.
This announcement was anticipated for release yesterday but as yet has not been made public.