HO CHI MINH CITY, Vietnam, Jan. 10 /CNW/ - Dragon Capital Management
Limited ("Dragon Capital"), investment manager of Vietnam Resource Investments
(Holdings) Limited ("VRI"), wishes to respond to a number of comments made by
Asian Mineral Resources Limited ("ASN") in the context of its January 8, 2008
shareholder's meeting. Dragon Capital and/or its affiliates directly and
indirectly manage four Vietnam focused investment funds, including VRI
(collectively, the "Dragon Capital Funds"), which are cumulatively the largest
shareholders of ASN.
Since VRI publicly requisitioned the calling of the January 8th meeting,
the board of ASN has completed two private placements resulting in the issue
of additional shares and warrants totaling approximately 40% of the then
outstanding ASN share capital. The effect of those placements has, first, been
to significantly dilute the interests of all existing shareholders, including
those such as some of the Dragon Capital Funds, who have invested and
patiently supported the company for considerable time periods through key
development phases. We observe that the reference in the ASN January 8, 2008
press release referring to shareholders confirming by a "substantial margin"
the tenure of the incumbent board solely results from the considerable number
of new shares issued by ASN in the short period of time prior to the meeting.
Second, given the timing and nature of the placements, they were, in our
view, effected to counter the efforts of the Dragon Capital Funds and all
other unrelated existing shareholders from passing judgment on the board's
performance. Indeed the timing of ASN's second private placement announced on
December 17, 2008 is notable as the date that ASN announced the receipt of its
project's mining licence. Under most normal circumstances, we would have
expected a board with the best interests of the company in mind to allow
sufficient time for such positive news to be absorbed and properly reflected
in the share price before raising additional funds through an equity issuance.
This approach however, would not have been consistent with the interests of
this board, which in our view sought to entrench its position prior to the
meeting by opportunistically securing these additional voting shares to their
Under the current board, Dragon Capital remains concerned that this
dilution strategy will continue. Based on ASN's 2007 updated feasibility
study, the project is only partially funded and there are no plans, of which
Dragon Capital is aware, for the company to consider debt financing which
would be normal and appropriate for projects of this nature. The decision of
the ASN board to commence development activities without having full funding
secured, in our view, introduces significant risk, particularly if the balance
of capital is funded by further issues of new equity. If recent events are any
indication, treasury issuances of additional shares will not be by way of
rights issues to existing shareholders, but by selective private placements.
Dragon Capital would welcome a clear and financially responsible statement
from the current board that it will maximize shareholder value by raising debt
financing or failing which issue new shares in an equitable rights issue so
that all existing shareholders can participate and avoid further dilution as
ASN completes the project funding.
Dragon Capital will continue to review the progress and activities of the
existing ASN Directors with active interest.
For further information:
For further information: