AUS: company fined for reporting failures

Listed mineral exploration company, Centrex Metals Limited (Centrex) has paid a AUD33,000 fine following an Australian Securities and Investments Commission (ASIC) investigation into its alleged failure to properly inform the market about the signing of a binding Heads of Agreement regarding the supply of hematite, a mineral form of iron oxide.Centrex agreed to pay the fine following an infringement notice issued by ASIC on 12 February 2008. The notice alleges that the company failed to comply with continuous disclosure obligations contained in the Corporations Act by not immediately notifying the Australian Securities Exchange (ASX) about the signing of a binding Heads of Agreement with Baotou Iron & Steel (Group) Company Limited (Baotou) of Baotou in the People’s Republic of China. This binding agreement concerned the supply of hematite from the Centrex’s Wilgerup iron ore deposit on the Eyre Peninsula in South Australia.The agreement committed Baotou to purchasing 1 million tonnes of Wilgerup hematite ore per year for a period of five years at the long-term international benchmark price. Centrex needed the Baotou Agreement, as well as other agreements concerning the supply of hematite ore which were later signed, in order to effect long-term contracts with Genesee & Wyoming, ABB Grain Limited and Flinders Ports for the transport and shipping of Wilgerup hematite ore. ASIC believes that late in the evening of Friday 25 May 2007 Centrex became aware that the agreement with Baotou had been signed in China but did not announce that information to the ASX until 12.11pm on Wednesday 30 May 2007.Centrex elected to comply with the infringement notice. As provided under the Act, compliance with the notice is not an admission of guilt or liability, and Centrex is not regarded as having contravened subsection 674(2) of the Act (obligation of an entity to provide information to market operator).