The Board of Directors are carrying on the business for you, the owners.
You have a right to have your say in how your Board runs the Company for you.
What would you like to see in the future?
More money shuffling between companies, or REAL action? vote YES for real action
Majority ownership of Fortitude Minerals and actual DRILLING instead of talking? vote YES
A Board who consider the shareholders, and keep them in touch properly, not with meaningless monthly updates and behind the scenes emails? vote YES
Note: In this article we refer to the resolutions as they are numbered in the original EGM request. The company has renumbered the resolutions in the official EGM notice.
Resolution 1.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That the non-renounceable pro rata entitlements issue announced by the company to the ASX on 7th November 2008 be withdrawn and, if deemed necessary by the board, the offer is to be reissued on terms that permit the issue of no more than 20% of currently issued capital.
This resolution is no longer relevant. At the time it was written CVI shareholders were attempting to get the rights issue delayed until it could be voted on by shareholders. Unfortunately those attempts were not successful. However, to see what we tried to do to make the board understand the dangers of this 100% dilution at a time when shareholders had no trust remaining in the company, please read here: Letter to the CVI Board Nov 9th, 2008
Resolution 2. (Now numbered as Resolution 3 on your voting document)
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That Mr Peter Mark Smyth be removed from his position as director, effective immediately and that any contracts enabling that appointment be terminated. That Mr Peter Mark Smyth be retained in his position as Chief Executive of Cityview Corporation Limited.
The fact that Mark Smyth IS the company is, in itself, a danger to the company. No single individual in any company should have this much power and influence. We do not feel that Mark is accountable to the board. Every shareholder should feel uncomfortable about this concentration of power and the risk it places the company in. Under this plan, Mark Smyth will still serve the company, the board and the shareholders as he is today in his role as Chief Executive.
What we are aiming to achieve here is to spread the influence and make him more accountable to the board. He must convince the board of the appropriateness of his actions and intent rather than dictating to them.
Board members with a direct line of communication to shareholders and who are in fact shareholders, will ensure that motions are carried for the right reasons, and are in the shareholders’ best interests.
For more information, see in latest news articles "Smyth - hopeless optimist, or unsubstantiated ramper?"
Resolutions 3 thru 7 are collectively referred to as “the disclosure resolutions”. (Now renumbered as Resolutions 4 to 7 on your voting document with changes to advisory resolution only)
Resolution 3.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That the company submit a current status position AND six (6) month forward STRATEGY PLAN FOR THE FOLLOWING CONCESSION AREAS:
Cachoeiras de Binga, Benguela, Zenza/Dondo, Benguela South West, Bentiabe, Longonjo (copper, gold, rare earth and diamonds), Catabola, Ucua, Chipindo, Nhefo ( alluvial and Kimberlitic) and Luachisse ( alluvial and Kimberlitic).
This document is to include details regarding legal status of each title, any expiry dates and conditions for renewal, money spent to date, summary of work done to date, issues preventing progress, milestone actions planned for the next 6 months and cash required for each milestone action.
This submission should be made available on the company website no later than 21 days after the passing of this resolution and its availability announced via the ASX.
Please see resolution 4 for comments on this resolution.
Resolution 4.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That the company submit a forward STRATEGY PLAN for the period immediately after the six months detailed in resolution 3 and up to Bankable feasibility stage, FOR THE FOLLOWING CONCESSION AREAS:
Cachoeiras de Binga , Benguela, Zenza/Dondo, Benguela South West, Bentiabe, Longonjo (copper, gold, rare earth and diamonds), Catabola, Ucua, Chipindo, Nhefo ( alluvial and Kimberlitic) and Luachisse ( alluvial and Kimberlitic).
This document is to include details confirming milestone actions planned up to and including bankable feasibility study and cash required for each milestone action.
This submission should be made available on the company website no later than 2 calendar months after the passing of this resolution and its availability announced via the ASX.
Resolutions 3 and 4 are essentially the same thing. 3 is for a preliminary report, 4 contains detail that will take some time to produce. They are separate resolutions as we did not want to give the company an excuse to delay the whole thing for the full two months.
These resolutions are in response to the fact that we have seen no progress with the development of any of Fortitude’s mineral assets, nor any explanation as to the delay. The drilling of Cachoeiras is one of Cityview’s best prospects for short term value creation. We are told by the company that drilling to a JORC compliant resource can be completed in a very short timeframe. The Price Waterhouse Coopers values our share of this resource (once JORCed) at between US$104 million and US$274 million. Between 21 and 68 times the current market capitalization of Cityview! The proving up of this resource alone could add significantly to the share price yet it has been inexplicably delayed despite vast amounts of funds being spent in ways that have not been explained to shareholders.
By compelling the Board to produce a strategy plan including milestones we will have a yardstick to measure their performance in this regard and thus make the Board accountable for failures to meet key objectives in the future. Until now this accountability has not existed and the result is no progress and no explanation.
Resolution 5.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That no more Fortitude Mineral Shares are to be purchased, or acquired via any form of transaction, until such time as:
A. A new independent valuation of Fortitude Minerals assets, which reflects current market conditions has been completed and accepted by the Board and:
B. Fortitude Minerals has demonstrated that it has legal title to the concessions named in resolution 3. (Luachisse and Nhefo excepted).
Aurum exploration services or companies and personnel associated with Aurum exploration services, including Dr. Michael H. Smith, are not to be used for any audits or valuations requested in these resolutions. Furthermore the Board must approve the selection of company and senior personnel that have been nominated by the CEO for such audits and valuations.
Additionally, Mr. Tony Caplin and any company or personnel associated with Mr. Caplin be excluded from providing such services.
Shareholders are unable to determine if recent Fortitude share purchases are still being made at $1.39 per share. If that is the case it is of great concern given the collapse in commodity prices. We have to ask on what basis is the purchase price being determined?
Serious questions have been raised as to the validity of Fortitude’s legal title to some of its concessions, it is difficult to find evidence of this on the public record and requests to the company to clear up this matter have gone unanswered. Part B of this resolution seeks to remedy this.
Resolution 6.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That the company provide to shareholders full audited evidence of monies received from all Share Placements during the past 18 months, and that this detail and all detail requested in this resolution must be provided within 21 days of the date of this resolution being passed.
Details are to include as necessary, extracts of bank statements, receipts, cheque clearing details, dates, amounts in any combination such that it can be conclusively proven that moneys have actually been received.
The Company at the same time is to provide full audited details of how these monies have been spent or utilised. A document including these details is to be made available to shareholders by inspection at the company registered office and provided electronically to shareholders free of charge by email on request. The company shall determine whether ASX listing rules require this to made available by ASX announcement and if so then provide the same document to the ASX as a company announcement.
Particular attention should be devoted to monies paid to Pensador. Furthermore, in the case of Pensador and Matanda, an explanation of available legal options for the recovery of monies paid is required.
Some $47 million has been apparently raised through numerous share placements over the past 2 years. During this time we have raised our holding in Fortitude from 32% to 46% at cost we estimate to be around $10 million. Aside from this we are at a loss to understand what tangible value we have derived from the spending of this money. Much of this spending is a mystery to shareholders.
This resolution seeks explanation as to how so much money has been spent and what the company has gained from it. It also seeks explanation for several payments vaguely described as ‘introduction fee’ or ‘promotional campaign’ fees. How these fees have benefited the company is also a mystery. The raising of this capital has come so far at the expense of diluting your issued capital to only 37% of its Jan 2006 percentage shareholding. If the currently proposed share placement goes ahead this will be halved to 13.5%.
You have a right to know what has been gained in exchange for diluting your holding by 769%.
Resolution 7.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That the company cause certified copies to be made of all documents relating to legal title of all mineral tenements it holds interests in either directly or indirectly through subsidiaries.
That these copies be sent to, and held at the company’s registered office in Perth and that they be made available for inspection to shareholders free of charge at the office on request, or including costs if mailing is necessary.
Similarly to resolution 5, this resolution offers a simple and inexpensive way for the questions over Fortitude’s legal titles to be put to rest. We have suggested this to the company but as received no response. Resolving these doubts will go a long way to restoring market confidence in Cityview so we can begin attracting new investors.
For more information relevant to the disclosure resolutions, see articles in news section "The missing resolution" and "Who is Anton Tarkanyi"
Resolution 8.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That due to the extraordinary share dilution created by Cityview since the issue of Company Options on 4th December 2007 with an exercise price of 15c, the exercise price be reduced from 15c to 4c with the expiry date remaining unchanged at 30th Nov 2009.
It was discovered shortly before the EGM notice was delivered that this resolution does not comply with ASX listing rules and therefore cannot be passed. We chose to leave it in however to give shareholders an opportunity to express support or otherwise for the principle. There are some potential mechanisms available in the ASX listing rules that might provide for the in principle proposal to be acted upon. It was thought that if a strong vote was passed the company might take this onboard and find such a mechanism.
Resolutions 9 thru 13 are collectively referred to as “the director resolutions”. (Now renumbered as Resolutions 8 to 12 on your voting document)
Resolutions 9a and 9b.
Election of Steven Patrick Coughlan and Susan Elizabeth Turner as Directors
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That Mr Steven Patrick Coughlan and Mrs Susan Elizabeth Turner, both being eligible, be elected as non-executive Directors.
See notes at the end of resolution 11.
Resolution 10.
Election of Timothy Michael Jones as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That Mr Timothy Michael Jones, being eligible, be elected as a non-executive Director.
See notes at the end of resolution 11.
Resolution 11.
Election of Alan John Paxton as a Director
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
That Mr Alan John Paxton, being eligible, be elected as a non-executive Director for a period of twelve months from the date of election.
The purpose of electing directors from among shareholders is threefold:
- The only director currently who owns any shares in the company is Mark Smyth. No other directors hold shares, only options that were awarded for no cost. Assuming Mark took up the entitlements issue we understand his total investment in CVI shares to be approximately $55,000. For a CEO on an annual salary in the region of $230k this is abysmal. There is no one on the board with significant personal financial risk at the moment. How can you be assured your interests are being looked after?
- It is only Directors that have the power to inspect financial records of the company. The company has dismissed the disclosure resolution as ‘advisory only’ and non-binding which means they can choose to leave out anything they don’t want to tell us. Only by having shareholder directors on the board who can investigate the numerous questions raised can you be assured that shareholders will get the answers they deserve.
- With trust in the company so shattered, anything they say to assure the markets is unlikely to believed. Witness the market non-reaction to recent ‘big announcements’ as a case in point. Only an independent Director with no previous relationship to the current board (and not chosen by them) will have the credibility necessary for the market to accept their findings that the company is on the best course.
There is a great deal more to this role than just sitting in on board meetings. The work required to investigate what’s happening internally will be enormous. This is why we need several directors. All of them have already put in huge amounts of time researching the company and preparing for the shareholder action. They have the background knowledge to hit the ground running and they have very strong commitment to getting the best possible result for shareholders. After all they ARE shareholders.
Resolution 12.
Remuneration of newly elected Directors
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
(a) That each Director successfully elected by resolutions 9,10 and 11 be awarded a minimal remuneration package of $12000 per annum.
Some criticism will no doubt be leveled for the inclusion of this resolution as self-serving. It is important to note however that if was not included the new directors would be awarded the standard director’s fee of $30000 per annum. The Director nominees have voluntarily chosen to reduce this amount in recognition of the fact that they are not experienced as public company directors. Also in order to demonstrate that their reward if any will be the increase in the value of their shareholdings which is directly tied to their performance in the role.
The amount of work expected as a result of the investigative aspect of the role will be considerable. Even more so now that the disclosure resolutions have been dismissed as non-binding, the onus will fall to these directors to ensure that you get the information and forward strategy plans you deserve.
Special Resolution 13.
To consider and, if thought fit, to pass the following resolution as a special resolution:
That the constitution of the company be updated, with immediate effect, as follows:
that section 32.4 (a) which reads:
"(a) A board meeting may be convened using any technology consented to by all Directors. The consent may be a standing one. A Director may withdraw consent to the use of a particular technology within a reasonable time period before a Board meeting.
be amended to read:
"(a) A board meeting may be convened using any technology consented to by all Directors. The consent may be a standing one. A Director may withdraw consent to the use of a particular technology within a reasonable time period before a Board meeting. That time being a period where each director could reasonably be expected to make arrangements to travel to location of the meeting.”
This is simply a cost saving feature to ensure that the company is not met with unnecessary costs for directors to travel to Perth too often for board meetings, and that teleconference meetings can be conducted if necessary.
It is also a safeguard in the unfortunate event that the company tries to lock out the shareholder advocate directors from an important Board vote by revoking consent at short notice. We sincerely hope this is not necessary however it is prudent to consider it.
