Rey Resources

Rey Resources is a small Sydney-headquartered company with interest in the development of coal projects. The company states that its strategy is to "develop an export thermal coal mining business as well as investigate the potential to develop underground coal gasification (UCG) and coal bed methane extraction."

Rey's coal interests
Rey Resources holds extensive exploration licences for coal south of Derby. The company states that the coal in the region is of thermal quality only and would be for export to China and India. The company states that the closest deepwater port would be the proposed Point Torment Port Development, approximately 175 kilometres to the north. (The alternative closer Derby Export Facility would have limited potential due to the substantial tidal range).

On its website the company states that:


 * Duchess/ Paradise Coal Project, is a notional mine which the company is investigating as a possible export thermal coal operation comprising open cut and underground mines. However, in March 2013 the company noted that, due to "the current softer thermal coal price" it was increasing its stake in nearby oil and gas exploration projects. The company stated that while it still intended to pursue the Duchess/ Paradise Coal Project "we believe the best interest of shareholders is further served by pursuing a diversified energy strategy."


 * Liveringa Coal Project, a possible underground coal mine.


 * the company also states that it is also considering coal bed methane extraction and underground coal gasification.

Board turmoil
In September 2012 the ASF Group become the largest shareholder in Rey Resources, holding approximately 23 per cent of the equity. In June Rey had issued 25 million Rey shares at 12 cents to ASF to raise $3 million and an additional 90 million shares at the same price to raise $10.8 million in early September. Part of the agreement with ASF was an 80-day period in which Rey and ASF would "explore opportunities for the joint development of the Duchess Paradise Project." Two nominees of ASF, Ms Min Yang and Mr Geoff Baker, were also appointed to the Rey Board. (ASF's shares are held by a subsidiary, ASF Canning Basin Energy.)

The following month, Miss Wanyan Liu, a private investor based in Hong Kong, bought 8.5% of the company from Australian institutional and shareholders. In a media release Rey stated that it was "informed that Wanyan Liu is not an associate of any other shareholder of Rey Resources."

Ahead of the company's November 22 annual general meeting, the ASF Group proposed a reduction in the size of the board and the resignation of most of the existing non-executive directors. In a media statement Rey stated that "ASF has requested the resignation of all but one of the existing independent non-executive directors and has proposed the future appointment of a non-executive director introduced by ASF. ASF has also requested the resignation of the Executive Director - Strategy." The non-ASF directors expressed alarm that with only 23% of the Shares ASF were proposing to reduce the board to four, with ASF retaining its two existing positions and nominating a third. The existing board proposed that the board structure should be two executive directors, two non-executive directors and two ASF nominated non-executive directors.

Two days after issuing its letter to shareholders Rey stated in a media release that ASF had proposed that a meeting of shareholders be convened "to consider resolutions to remove Ms Maree Arnason (Executive Director – Strategy), Mr Ronnie Beevor (Independent Non-Executive Director) and Mr Brett Clark (Independent Non-Executive Director) as Directors of the Company and the appointment of Mr Dachun Zhang as a Director."

Company finances
In March 2013 Rey Resources announced that they had issues 55 million shares at $0.055 cents to raise $3.025 million to Crystal Yield Investments Limited. In a statement filed with the Australian Stock Exchange the company stated that the proceeds of the share issue would be used "for the Duchess Paradise permitting process."

Rey stated that "following the Placement, Crystal will own approximately 9.7% of the Company’s issued securities. Crystal has also been granted exclusivity for 3 months to complete due diligence investigations on the Duchess Paradise coal project, with a view to financing future development of the project."

Rey also stated that it had agreed, subject to shareholder approval, to pay a fee of 5% of the value of the placement to ASF Capital Pty Ltd for its "advisory and co-ordinating role in relation to the Placement". The fee is worth approximately $151,250.

Board of Directors
As of March 2013, the current members of Rey Resource Board of Directors are:
 * Min Yang, Non-Executive, Independent
 * Geoff Baker
 * Kevin John Wilson, Managing Director, Executive

Directors who resigned in 2012 board turmoil
In November 2012, a subsidiary of ASF Resources, ASF Canning Basin Energy, requested a meeting of shareholders to consider resolutions to remove Maree Arnason (Executive Director – Strategy, Ronnie Beevor (Independent Non-Executive Director) and Mr Brett Clark (Independent Non-Executive Director) as Directors of the Company. ASF were also seeking the appointment of Mr Dachun Zhang as a Director.

Shortly after this request, Charlie Lenegan, the Chairman and Non-Executive Director and Lexton Mark Graefe, an independent Non-Executive director, both resigned from the board. The following week Beevor, Clark and Arnason also resigned from the board and Arnason as a company executive "effective immediately." This left Wilson, Baker and Yang as the company's sole Directors though the company stated that "a recruitment process will commence shortly to seek suitable Board replacements." As of March 2013 no additional directors have been appointed.

Contact details
Sydney Office: Suite 802, Level 8, 50 Clarence St Sydney NSW 2000

Mail Address: PO Box Q93, Queen Victoria Building, Sydney, NSW 1230

Telephone: +61 (0) 2 92 999 357 Fax: +61 (0) 2 92 621 403 Email: info AT reyresources.com Website: http://reyresources.com/

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