Tenkomining plc: Dispute over correct drill at mining firm

On April 29th, 2010, Dublin-based Teknomining plc, announced its admission to the Plus market in London and that trading in its 40 million issued shares could start.

The admission price was 9.5 pence making for a nominal value for the company of £3 million.

Incorporated just four months earlier, Teknomining had “secured full rights to two exploration licences over land areas in the Province of Kiyarbakir”, in Turkey.

The executive chairman was Liam McGrattan, who was at the time a director of three other Dublin-based, Plus-listed companies: Great Western Mining plc, US Oil & Gas plc, and Captive Audience Display Solutions plc (Cads).

The company's finance director was Nial Ring. "He holds a number of directorships and has served as a government appointee on the board of IDA Ireland," the company said. Ring was a director of Great Western Mining, US Oil & Gas, and a subsidiary of Cads.

The launch went well and in May 2011 Teknomining won the Plus-SX initial public offering of the year award, at a ceremony in the headquarters of the British Academy of Film and Television Arts (Bafta), hosted by James Caan, formerly of the BBC's Dragon's Den. The IPO had raised €568,093.

During 2010 the share price went as low as 13p and as high as £2.42. In July 2011, the company raised a further £250,000 from a shares issue.

In October the company issued what it called an “encouraging update on drilling”. On November 18th, however, the company told the market that McGrattan had, at “10.26pm on the 17th”, announced his resignation with immediate effect. The reason was not disclosed.

In December 2012, Ring and another director stepped down from the board, and Sean Finlay, Matthew Farrell and Roger Norwich were appointed. Upon his appointment, Finlay said the new board would undertake a review of the company's affairs.

A month later he told shareholders that he and others had travelled to Turkey and found that work there “has identified targets for iron and copper mineralisation which warrant further investigation. However, work to date is not sufficient to enable the reporting of mineral resources or reserves which conform to any recognised classification systems. The directors have reviewed and edited the company’s website with a view to providing a balanced view of exploration results to date.”

An announcement after a second visit was even more alarming. In April 2013, the board told shareholders it had received reports from five independent experts. Among the findings were: “The exploration work carried out to date on the company’s licences has not resulted in the outlining of mineral resources or reserves which conform to any recognised classification system.”

It said more time and money would need to be spent, with no guarantee of success, and the company would be unlikely to be able to fund itself.

The statement to shareholders, which is still on the company’s website, said an agreement with a local landowner remained unfulfilled and, failing its completion, “the landowner will not allow access to his property, which is the company’s main target for copper and nickel”.

The following day, trading in the company’s shares was suspended at the directors’ request.

The board called an EGM where its recommendation that the company be liquidated was rejected. Following the meeting the directors were served with notice of defamation proceedings against them by McGrattan and Ring. They said they would vigorously contest the action.

Ring told The Irish Times that all announcements issued during his time on the board of Teknomining had been approved by the company's corporate adviser and that he had no difficulty standing over every one. He was confident that the company's fortunes would improve.

At the end of January 2012 Teknomining had accumulated losses of €658,039, and cash of €22,469.

Trading in its shares remains suspended.