The first relates to fraud and embezzlement of funds solicited from Emperor and Intrepid by PT IMN with the promise of the grant of shares in PT IMN, and the continued calling of funds after it became apparent that PT IMN and its shareholders had no intention of honouring the agreements in place with the Company.
The second complaint relates to the unlawful denial of access to site and unlawful retention of equipment and intellectual property. Under the terms of the Alliance Agreement, intellectual property situated at the Project site belongs to Emperor, and the Company sourced, bought and paid for several items of technical equipment which are now being withheld from it.
The complaints were made in October 2012and the Indonesian police are progressing their investigation, including interviews of the original and current shareholders of PT IMN.
Unusual share trading activity
The Company regularly interrogates shareholder movements and is aware that there has been a noticeable and unusual shareholding build-up by two brokers in Singapore, both of whom cite local privacy laws as a reason for declining to cooperate with section 672 notices requiring disclosure of beneficial holders. A fund from Singapore, Quantum Pacific Capital, has also been very actively lobbying the Company's major shareholders to sell significant stakes to Quantum at discounted prices and have nominated potential new directors and management for the Company.
Intrepid asserts that it has complied fully with the terms of its agreements, and has acted at all times in full compliance with relevant laws. Intrepid asserts that it remains legally entitled to an 80% economic interest in the Tujuh Bukit project, and disputes that the current uncertainty over ownership rights is merely a contractual dispute between commercial partners. Intrepid further asserts that it is the victim of an attempt at criminal fraud that is now under investigation by Indonesian Police.
Intrepid Chief Executive, Brad Gordon, stated that the Company intends to use every means at its disposal to frustrate these attempts to usurp its rights to the Project. "Nothing is as critical to our future and our shareholders' interests as resolving this matter, and we intend to focus all our people on it, and devote all our resources to supporting their actions", he said. "While we remain confident that our complaints of criminal fraud will be upheld, nobody should question our preparedness for a long-term battle to retain our rights, if that should be what is required."
"In the meantime, Intrepid advises shareholders to treat with caution any offers or representations from parties that may be associated with the actions against your Company. We remain available to discuss the background to and progress of matters with our shareholders."
Ian McMaster AM Brad GordonChairman Managing Director and CEO
Background: Intrepid's predecessor, Emperor Mines Pty Limited ("Emperor") began its working relationship with PT Indo Multi Niaga ("PT IMN"), then owned by Indonesians Andreas Reza Nazaruddin ("Reza") and Maya Miranda Ambarsari ("Maya"), in 2007.
In 2007, Emperor management was approached by Paul Willis, an Australian associate of Maya and Reza, with an offer to participate in a mining project at Banyuwangi, East Java, which later came to be known as Tujuh Bukit. The Emperor technical team reviewed the project and subsequently, on 19 August 2007, an agreement was signed amongst Emperor, PT IMN, Maya, Reza, Mr Willis and associates of Mr Willis (together, the "Counterparties"). Under the terms of this agreement (the "Initial Alliance Agreement"), Emperor could earn a 70% economic interest in the Tujuh Bukit project (the "Project") by incurring expenditure of A$8 million in milestone payments and project funding. Emperor was then required to sole fund a further A$42 million in project expenditure.