Dampier Gold downplays mysterious website claims about China food stores
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A website claiming Dampier Gold’s retail food business has opened its first store in Tianjin, China, has caused some confusion among investors.
Dampier Gold (ASX:DAU) is primarily a West Australian focused gold explorer — but it has dabbled in exporting food to China via its Aurigin Foods business.
Stockhead was recently made aware of a website, auriginfood.com, which claims: “Aurigin Foods Pty Limited, a wholly owned subsidiary of Australian listed group Dampier Gold Limited, announced that its first physical store chain opened” in Tianjin.
The website claim conflicted with a recent response Dampier made to the ASX, when it said that no stores had been set up in China or elsewhere. The ASX had asked why Dampier did not tell investors about franchise agreements that Aurigin Foods Franchising struck with five different parties.
Dampier chairman Malcolm Carson told Stockhead statements made on the mysterious site about Aurigin having already opened a store were incorrect. He said he didn’t know who owned the website.
“There is a store that doesn’t belong to Aurigin, an Australian product store, that did ask if it could use the sign to try and improve their sales but it’s not an Aurigin store,” he said.
“That’s the one in Tianjin, but it doesn’t actually belong to Aurigin.
“I am not sure who owns the auriginfoods.com domain. I think the web developers might have set it up.
“We do have some web developers that are working on a site, but it’s not an official site,” Mr Carson said.
A ‘good deal’
Dampier has plans to offload the Aurigin food chain business — a decision some investors have not been happy about. But the junior explorer believes it is the right move.
Shares have slipped back from a 52-week high of 5.2c just prior to the announcement to 2.8c on Wednesday.
Dampier revealed in January that it had entered into a share sale agreement to sell Aurigin Foods to Aurigin Australia Limited, a company associated with Mr Carson and another Dampier director, Annie Guo.
The deal would see Dampier retain a 33.3 per cent stake in Aurigin.
“We’re a mining company, we’re not a food business company,” Mr Carson said.
“So if we left it in Dampier we were faced with quite a substantial dilemma. The dilemma was that we would be suspended [from the ASX] and we would have to re-comply.
“The problem with that is unless you can value the business at $5 million you can’t re-comply and we would also lose the mining business.”
Dampier currently has a market cap of $3 million.
“I know that people are not happy with what’s happened, but it’s actually a good deal for Dampier,” Mr Carson said.
“Dampier will end up with a percentage of an asset which may or may not be successful, we think it will. It’ll get its money back and it’s still got the mining business.”
While the company’s key focus is on moving forward with the development of its K2 mine in WA, Dampier is also looking at expanding in the gold space.
“Now that we’ve tidied up this Aurigin business, which was potentially becoming a distraction, we can now look at perhaps doing something else with Dampier and I’ve got a couple of things that I think look quite interesting,” Mr Carson said.
“But Dampier will stay in the gold business, we’ll expand that business and Dampier will have this interest in the food business.”