Possible Claim by Tennant Metals Pty Ltd and MIT Nominees Pty Ltd

 
TIDMFND 
 
For Release: 12 August 2010 
 
 
                           FINDERS RESOURCES LIMITED 
 
 
       Possible Claim by Tennant Metals Pty Ltd and MIT Nominees Pty Ltd 
 
Finders Resources (the Company) has been advised that possible legal claims may 
be instigated by two minority shareholders in the Company.  The Company believes 
the claims are without foundation and, if legal proceedings commence, they have 
little chance of success. 
 
The claims have been made by Tennant Metals Pty Ltd (Tennant) and MIT Nominees 
Pty Ltd (Meridian) in relation to certain historic reports, announcements and 
presentations made by the Company. 
 
Background 
 
In early 2008, the Company placed an aggregate of 5,165,289 shares at $1.10 per 
share to Tennant and Meridian as part of a financing to fund construction of the 
Wetar Copper Project's Demonstration Plant (the Project).  Tennant and Meridian 
conducted their own due diligence as sophisticated equity investors.   This 
financing also included a secured loan agreement of US$5 million from Tennant 
and Meridian (which was repaid in September 2009). 
 
Possible claim 
 
Tennant and Meridian have now indicated that they intend to commence legal 
proceedings against the Company and /or its Directors based on the claim that 
certain historic reports, announcements and presentations made by the Company in 
relation to the timing and costs of the Project and its commercial development 
were  misleading or deceptive.  Tennant and Meridian are seeking to recoup their 
alleged loss on their initial capital investment, despite remaining the 
registered holders of substantially all of the shares they subscribed for in 
2008. 
 
In essence, the basis of these claims is that, given the final cost and timing 
of delivery of the now successful Project and its expected commercial 
development, the Company could not at the time have had a reasonable basis for 
its various announcements.  The Company notes that Tennant and Meridian received 
detailed and on-going information flow in respect of the Project during the 
course of the loan financing arrangements.  After an external legal review of 
material underpinning its past announcements and after receiving legal advice 
from the Company's legal advisers, the Company has rejected the allegations and 
is confident that if any proceedings are commenced by Meridian and Tennant they 
would have little chance of success. 
 
The Company has rejected Tennant and Meridian's allegations. 
 
 
Should any legal proceedings commence, the Company believes that the legal costs 
and any potential liability can be managed by the Company in the ordinary course 
of business and, to the extent relevant, within its directors and officers' 
liability insurance arrangements. 
 
The Company is continuing with its expansion program for the Project, which is 
estimated will increase copper cathode production to 23,000 tonnes per annum. 
The financing discussions for the expansion are now at an advanced stage.  The 
Company believes any legal proceedings would be unlikely to materially impact 
the operational and financial management of the Company. 
 
 
 Finders Resources Ltd: 
 
 Russell Fountain   Non-Executive Chairman        [phone] 
 
 Chris Farmer       Managing Director             [e-mail] 
 
 
 
 Financial PR: 
 
 Stuart Carson      FD Third Person (in Sydney)   [phone] 
 
 Nick Elwes         College Hill (in the UK)      [phone] 
 
 
 
 RFC Corporate Finance Ltd - Nomad: 
 
 Rob Adamson        Managing Director             [phone] 
 
 Stuart Laing       Executive Director            [phone] 
 
 
 
 finnCap -  Finders' Broker for the AIM market: 
 
 Matthew Robinson   Corporate Finance Director    [phone] 
 
 Joe Lunn           Analyst                       [phone] 
 
 
[HUG#1437470] 
 
 
 
 
 
 
 
 
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Source: Finders Resources Limited via Thomson Reuters ONE