“Should Minco have failed to secure funding in proportion to its current Pallas Green participation, its shareholding could have been diluted to an agreed ‘base’ level of 10%. In successfully raising this new funding, however, Minco’s management is underlining its determination to remain fully involved in the project.”
“Additional funding will be required as phased payments become due later this year. Management’s confidence in the [Pallas Green] Project suggests that it will make every effort to retain its current participation, although it is worth noting that the JV agreement with Xstrata does not permit Minco’s holding to be cut below 10%, even if it is unable to contribute to continuing exploration programmes.”
“Obviously Barry was restricted from telling you this was in composition yesterday under FSA rules”
“Looks as though its exactly what Barry told us yesterday”
“This is what you remembered and I didn’t. I suppose we can expect a further cash call some time in Q3 or Q4 this year. Did you call them to confirm our interest in participation in a placing? On Barry’s inclusion of the above point, I would change my view and expect that they may be interested.”
“Principal risks and uncertainties”
“Failure to obtain additional financing on a timely basis could cause the Group to forfeit its interest in [the Group’s exploration] properties. If additional financing is raised through the issuance of equity or convertible debt securities of the Group, the interest of the shareholders in the net assets of the Group may be diluted.”
“The question regards Xstrata’s contractual right to effect a diminution of Minco’s current 23.6% stake in Pallas Green in circumstances (unlikely, of course) that Minco was not able to service its share of any approved exploration costs. The investor wanted to know the exact basis on which Xstrata would be able to force this diminution, on what basis the shares involved in the diminution would be valued, whether it had to be effected through a transaction on the stock market together with the time period in which it would need to be completed. A lot of this is legal and contractual stuff and so might be a bit laborious to answer. Nevertheless, any help on this front would be most appreciated.”
“If Minco were not to participate at its full … level of interest such interest will be diluted gradually. That is why [Minco] currently has 23.6% interest and not 25% because we could not fully participate one year. It is a complex formula based on total expenditure on the property and the contribution made by the parties. If either party is diluted below a 10% participating interest then the interest is converted to a 10% carried interest in the project. Hopefully this give [sic] you some clearer insight.”
“At the last AGM Mr Killen [sic] praised Mr Kearney for having the foresight of negotiating the 10% free carry option with Xstrata. It was to be our safety net if all else failed. We have 10% profit from a world class resource in 2017 until possible 2032. ..”
“The option of ‘opting’ for a free carry on Pallas Green for a reduced 10% (free carry) royalty on mine output is available. This was mentioned given the need to inject up to$8 mil into Xtierra [sic] to hold Minco’s share of that company at current levels, i.e. Minco raises this on the market. This is the Nuclear option if the share price stays depressed and in order not to dilute shareholders into oblivion and to keep a reasonable share of both projects.”
“… it was traditional for Mr Kearney to lead the business portions of the annual meetings. Other directors were in attendance and we were available for chats later over tea.”
“FYI. I don’t think we should let him see the JV agreement with or without a confidentiality agreement in place. He knows already that the bottom line is a 10% carried interest and that Xstrata has a pre-emptive right on the sale of our interest.”
“He said little but listened intently to everything and was engaged in the discussion at all times”
“There is provision for a carried net profits interest.”
“…[I]t is essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not, and where there is a conflict of evidence … reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities can be of very great assistance.”
“…fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief.”
“I apprehend it to be the rule of law, that if persons take upon themselves to make assertions as to which they are ignorant whether they are true or untrue, they must, in a civil point of view, be held as responsible as if they had asserted that which they knew to be untrue. Upon that part of the case, my Lords, I apprehend there to be no doubt”; (2) Simon Brown LJ in Economides v Commercial Assurance Co. Plc[1998] QB 587 at 598D-E to the effect that a representor cannot“simply make a blind guess: one cannot believe to be true that which one has not the least idea about”; and (3) Chitty on Contracts (32nd ed.) at para 7-050, citing Reese River (above): “The requirement of proof of the absence of honest belief does not, however, mean that the claimant must prove the defendant’s knowledge of the falsity of the statement. It is enough to establish that the latter suspected that his statement might be inaccurate, or that he neglected to inquire into its accuracy, without proving that he actually knew that it was false. Thus where directors issued a prospectus setting out the advantages of a particular mine, without having ascertained the truth of these representations, they were held to have committed a fraud.”
“A man may be said to know a fact when once he has been told it and pigeon-holed it somewhere in his brain where it is more or less accessible in case of need. In another sense of the word a man knows a fact only when he is fully conscious of it. For an action of deceit there must be knowledge in the narrower sense; and conscious knowledge of falsity must always amount to wickedness and dishonesty. When judges say, therefore, that wickedness and dishonesty must be present, they are not requiring a new ingredient for the tort of deceit so much as describing the sort of knowledge which is necessary.”
“The passages about knowledge – knowingly making it, and making a statement without believing its truth, are based upon the supposition that the matter was really before the mind of the person making the statement, and if the evidence is that he never really intended to mislead, that he did not see the effect, or dream that the effect of what he was saying could mislead, and that the particular part of what he was saying was not present to his mind at all, that I should say is proof of carelessness rather than of fraud.”) and (2) Bowen LJ in Le Lievre v Gould[1893] 1 QB 491 at 500-1 emphasising that even gross negligence, in the absence of dishonesty, did not of itself amount to fraud and that “not caring” about the truth of the representation did not mean “not taking care to find out whether the statement was true or false; it meant not caring in the man’s own heart and conscience whether it was true or false”, which would be “wicked indifference and recklessness”
“200. Turning to the issues of materiality and inducement, there is a material misrepresentation where the false part of a statement is objectively likely to have constituted an inducement to the recipient to enter the contract, not in the sense of being the sole or the predominant cause but merely one of the inducing causes. 201. Once the misstatement is shown to have been material, then there is ‘a fair inference of fact’ that the recipient was induced by the statement: see Chitty on Contracts (29th Ed) at Para 6-035 and the numerous cases cited in note 162. 202. In cases of fraudulent misrepresentation a more rigorous rule is applied, sometimes described as being by way of deterrence: see Chitty (op. cit.) at para 6-034. It is not enough for the representor to show that the representee would, even if the representation had not been made, still have entered the contract. It is sufficient for the representee to show that the misrepresentation ‘was actively present to his mind’ (per Bowen LJ in Edgington v Fitzmaurice(1885) 29 Ch D 459 at 483).”
“… There is a question as to whether we shareholders would be better off not suffering further dilution and allowing our interest to fall to 10% but I think we would only come out ahead if the company was to see 2.3 times the present number of shares. I’m in here because I think the combination of a diminutive company with a decent-sized resource and the backing of a global mining giant is unusual and gives Minco a stamp of credibility that I can’t find elsewhere. If anyone else can, I’d be delighted to hear from you … - the above are of course simply my opinions.”
“Failure to obtain additional financing on a timely basis could cause the Group to forfeit its interest in [the Group’s exploration] properties”
“314. In this respect, the key question, as it seems to me, is whether the clause attempts to rewrite history or parts company with reality. If sophisticated commercial parties agree, in terms of which they are both aware, to regulate their future relationship by prescribing the basis on which they will be dealing with each other and what representations they are or are not making, a suitably drafted clause may properly be regarded as establishing that no representations (or none other than honest belief) are being made or are intended to be relied on… 315. Per contra, to tell the man in the street that the car you are selling him is perfect and then agree that the basis of your contract is that no representations have been made or relied on, may be nothing more than an attempt retrospectively to alter the character and effect of what has gone before, and in substance an attempt to exclude or restrict liability.”
“For the claimant Mr Coleman submits that these representations are not contractual warranties and therefore contractual estoppel does not apply. Further Mr Coleman submits that the clauses are not ‘basis clauses’ but clauses which exclude liability and submits that the representations seek to rewrite history and part company with reality. The claimant relies on the authority of Raffeisen Zentral Bank v Royal Bank of Scotland[2011] 1 Lloyd's Rep 123 at 313 – 315 that to the extent the clause seeks to change the character of the parties’ previous dealings, it will be treated as an exclusion clause. To the extent that the effect of such clauses is to exclude liability for negligence they are subject to the test of reasonableness insection 2(2) of the Unfair Contract Terms Act 1977 .”
“105. It seems to me that the passages on which the claimant seeks to rely have to be read as a whole and in my view the test is not whether the clause attempts to rewrite history or parts company with reality. The first step is to determine as a matter of construction whether the terms defined the basis upon which the parties were transacting business or whether they were clauses inserted as a means of evading liability… 111. In my view recent authorities have been very clear that parties may agree the basis on which they are entering into a relationship. The effect of such a clause is that the party is contractually estopped from denying to the contrary. This is so even where for example parties agree that one party has not made any pre-contract representations about a particular matter and both parties knew that such representations have in fact been made… Thus I reject the submission that the test is whether the clause ‘rewrites history’. Nor does anything turn, in my view, on the fact that the confirmation was not received back for some months after the deal was entered into. It was signed by the claimant and returned to Barclays and this is the basis on which the parties agreed to enter into the relationship. 112. It follows from this that no question of reasonableness arises and as a matter of construction of the relevant provisions, even if I had concluded that recommendations or advice had been given, the claimant is contractually estopped from asserting that Barclays gave advice or a recommendation to enter into the swap transaction. The essence of the claim is that the claimant alleges that Barclays assumed an advisory relationship through its information and explanations. This is the specific matter which is addressed in paragraph (a) ‘non-reliance’ in the confirmation and the claimant is therefore estopped from asserting this.”