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Shree Minerals, Nelson Bay River mine site. taken Aug 2014

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Bryan Green, then Deputy Premier; now Opposition Leader, and Shree’s Sanjay Loyalka ...

Long after the ASX finished trading last Friday, at 7.15pm (a time when most self-respecting analysts are into their third glass of pinot noir), Shree Minerals released details of what they call a ‘pro-rata, non renounceable rights issue.’

I have a different name for it – a dishonest grab for $1.6 million.  I suggested back in May that the Shree’s Board’s only real skill was in raising money from shareholders, and again, they’ve done me proud.

Shree has already walked away from its failed Tarkine mining venture, leaving a trail of unpaid bills and deferred royalty payments. 

Like Monty Python’s Black Knight, Shree’s fate is inevitable.  The limbs may be hacked and severed, but there remains an outstretched hand, waiting to be filled with cash from gullible investors.

It’s an extraordinary display of corporate arrogance which tramples not only on the rights of investors, but shatters just about every ethical standard of governance.

Shree’s directors, Sanjay Loyalka , Rajesh Bothra, Andy Lau and Amrital Shah will all benefit handsomely from any money raised.  All are being paid directors’ fees, with head honcho Sanjay still picking up $300,000 each year, in addition to $200,000 from Wollongong Coal, an associated venture. 

Yet none will take part in the capital raising themselves - they aren’t contributing a cent.  In fact they are being paid – 5% of funds raised will be given to them as underwriting fees, even though exit clauses in the self-written underwriting agreement are broad enough to ensure it’s never exercised.

Then there’s the issue of disclosure.  Rather than present a set of audited accounts for investors to peruse, or perhaps even up-to-date financials, Shree will send shareholders an abridged and modified set of accounts which are five months out of date, accompanied by a hefty disclaimer that investors should conduct their own due diligence.  At least we agree on that score.

The capital raising will fail, but Shree has written enough flexibility into the documents to ensure Directors keep getting paid for a few months. 

With more than half the shareholder base (mainly Sanjay and his mates) already ruling themselves out of putting in money,  the most that could be raised in the initial cash grab is around $700,000.  That’s why there’s enough flexibility in the document to go back and have a second bite at small investors in a few months.

There’s a good chance Shree’s auditors will take a dim view of this, along with ASIC and the ASX.  But the big loser is Tasmania.

Shree was trumpeted by politicians on both sides as one of North West Tasmania’s economic saviours.  Instead, it now has the credibility of the aforementioned Monty Python sketch.

A full analysis of Shree Minerals’ capital raising is available from the analyst by subscription, here: .(JavaScript must be enabled to view this email address)

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Shree Minerals, Nelson Bay River mine site. taken Aug 2014

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Shree Minerals Nelson Bay river mine site, taken Aug 2014.

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Waste water in un-rehabilitated abandoned mine site at Shree Minerals, Nelson Bay River mine.

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Acid producing waste rock at abandoned Shree Nelson Bay River, taken Aug 2014

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Shree Minerals, Nelson Bay river mine site, taken Aug 2014

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The abandoned Shree Nelson Bay River mine site, taken August 2014

• All pictures and captions from the Facebook page, Tarkine Action: https://www.facebook.com/TarkineAction

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