ASIC has commenced civil penalty proceedings in the Federal Court against Australian Mines Limited (ASX: AUZ) for allegedly breaching its continuous disclosure obligations and its managing director Benjamin Bell for allegedly breaching his directors’ duties.

On 19 February 2018, Australian Mines announced to the ASX that it had entered a term sheet for an offtake agreement with SK Innovation for the expected cobalt and nickel product from Australian Mines’ major asset, the Sconi Project.

ASIC alleges that when Mr Bell presented at mining investment conferences in Hong Kong and London between April and May 2018, he:

falsely claimed that Australian Mines had secured funding from SK Innovation for its construction of a plant for the Sconi Project, expected to cost $500 million or more, when in fact no one had offered or agreed such funding, and
misleadingly stated that the value of the offtake agreement was $5 billion when the terms of the agreement included a potential buyer’s discount of 15%.

ASIC further contends that Mr Bell’s $5 billion valuation did not comply with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).


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A video of Mr Bell’s London presentation was subsequently uploaded to YouTube.

On 27 June 2018, Australian Mines publicly retracted claims Mr Bell made at the London mining investment conference.

ASIC contends that Australian Mines failed in its obligation to disclose material information to the market. ASIC also contends that Mr Bell failed to discharge his duties as a director with the requisite care and diligence that a reasonable person in his position would have exercised.

ASIC is seeking declarations that Australian Mines and Mr Bell contravened provisions of the Corporations Act, orders for Australian Mines and Mr Bell to pay pecuniary penalties, and that Mr Bell be disqualified from managing a corporation.


Australian Mines is a listed mining and exploration company which is principally based in Western Australia. Its major asset is a scandium, cobalt and nickel deposit near Greenvale, Queensland about 250km west of Townsville, called the Sconi Project. Cobalt and nickel metals are used in the production of batteries for the electric vehicle industry.

ASIC wishes to acknowledge the assistance of the UK Financial Conduct Authority for their cooperation during this investigation.

Originally published by ASIC