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BMR Scandal - what about the November Placing? A Very Angry Bear comes a-calling

By Nigel Somerville, the Deputy Sheriff of AIM | Thursday 8 February 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Further to my pieces on the BMR Scandal, we might note that BMR completed a Placing via those fine upstanding chaps at Peterhouse Corporate Finance to raise £0.8 million at 2p, as announced on 14 November last year. This was, of course, when BMR knew – but the market did not – that it had received a default notice regarding its Kabwe project in Zambia.

So despite BMR knowing the Kabwe license was under threat, the market had yet to be informed. We now know that Jubilee knew nothing of it when it subscribed for 29% of the company last month. Are we also to assume the placees knew nothing of it too, last November?

Again, I ask the question as I’m not a lawyer: what part of that does not look like securities fraud?

To make matters worse for BMR, I have tracked down a Very Angry Bear who holds shares in BMR and he’s not impressed at all.

Alex Borelli told us yesterday (with a completely straight face, no doubt) that:

We had understood that all mining companies in Zambia had received the default notice and we had responded accordingly

Oh, so he thought everyone in Zambia has received a default notice, and that’s why he didn’t bother to tell the market of the threat to the license? Well, that’s alright then. Don’t worry about AIM Rules, which tell us that:

An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities.

Who believes that shares in BMR would have not dropped like a stone if the market knew that it had a default notice against it? Well, of course, we know who: the Nomad W H Ireland, which didn’t resign on the spot yesterday, nor did it force Mr Borelli’s resignation.

Of course, as far as W H Ireland is concerned, its primary focus is the welfare of BMR’s shareholders. So it won’t have taken the view that this farce could lead to a big refinancing and maybe even the bumper fees involved with doing an RTO. Oh no, no, no. Wash my mouth out - how dare I even think such a thing. W H Ireland is staying put because they hope something can be saved from this mess for shareholders – if it resigned it would be game over.

Oh to be a fly on the wall when the Very Angry Bear comes a-calling. The good news is that we shall hear from Mr Very Angry Bear in due course. Beer and popcorn at the ready....

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