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For Bridges it's all in the timing

The serial biotech board director Mel Bridges has raised a few eyebrows over the timing of his recent purchase of shares in Alchemia, a company he chairs.

The serial biotech board director Mel Bridges has raised a few eyebrows over the timing of his recent purchase of shares in Alchemia, a company he chairs.

Bridges on Thursday disclosed he had snapped up 87,000 Alchemia shares for 34.5? each. This followed a more than 50 per cent slide in Alchemia's share price since the start of August, fuelled by concerns the company could struggle to fund the Phase III trial of its HA-Irinotecan coloreactal cancer treatment.

Only two weeks ago, Alchemia's chief executive, Pete Smith, noted the "working capital cap" between the $5.6 million of cash the company had on its balance sheet and the $20 million cost of the trial.

"This is something that's clearly troubling the market at the moment," he conceded on August 26.

Smith, in the same interview, said Alchemia was looking at "different financing opportunities" including a share issue, taking on debt that could be repaid by future equity raising, the securitisation of revenue of one of its other treatments or a convertible note issue.

Smith also raised the more palatable idea of trying to sell the European rights of its HA-Irinotecan treatment. "We could consider selling the European rights or regional rights for a sum of money that enables us to start the trial and that is actually something that we are looking at doing," he said.

Fast forward to Friday, two days after Bridges's share purchase. Shares in the company jumped 14.9 per cent to 42.5? after an encouraging investor briefing.

Smith said the company was close to finalising plans to fund the Phase III trial and believed the preferred strategy was achievable.

"The top of our mind is limiting that dilution," he said.

"We know we have to give clarity to the market about the funding. I believe we will able to do that in the not too distant future."


Just when it appeared nickel miner Albidon Limited had seen the worst of its troubles, it seems things are about to get a lot worse for the miner which has had its share price slip by more than 98 per cent since May 2008.

Albidon, whose shares are in a trading suspension, on Friday announced that a review of its operations had discovered that "metallurgical recoveries" reported in its June quarterly update were incorrect.

"The actual metallurgical recovery results are materially lower than those disclosed," the company said, referring to its Minali mine in Zambia.

The announcement is set to inflame tempers among Albion's minority shareholders, some of whom claim the company has been hijacked by its 50.4 per cent shareholder, the state-owned Chinese nickel concern Jinchuan.

The review of Albidon's operations is being undertaken by the advisory group founded by the Lynas executive chairman, Nick Curtis, Riverstone.

One of the initial steps undertaken was for Albidon to dump its chief executive, Jian-Hua Sang, in July and appoint Riverstone's co-founder, Harold Wang, as its acting chief executive. Wang joined the Albidon board in August last year.

Some observers are now wondering why Albidon, which only came out of administration late last year, was allowed to recommence trading last year given that it was still carrying more than $100 million of debt.

Jinchuan boosted its stake from 5.6 per cent to 50.4 per cent as part of the recapitalisation of Albidon, where it injected $US7 million ($6.7 million) of funds in return for 135 million shares at 5.2? each (or 1 per cent of their value at their peak). The Chinese bought a further 323 million convertible notes, which when converted will see Jinchuan own a 74.4 per cent stake.

Jinchuan took its original equity stake in 2008 via a "life on mine" off-take agreement with Albidon.


It appears the chairman and chief executive of the cash-strapped drilling company AJ Lucas might be able to recycle some of the lines used in his speech at last year's annual meeting.

After reporting a $7.1 million loss in the 2010 financial year, Allan "Six Million Dollar Man" Campbell remarked: "I do think the business has turned and the outlook has much improved.

"We never expected that it would be a good year but nobody could have predicted all the events which impacted our performance."

The company, which has been in a five-month trading suspension, has finally released its accounts for the year to June 30, which contain an $11.5 million full-year loss. The good news is the group reported a $6 million profit in the second half.

But it may not be enough for Campbell to temper any of the lingering shareholder anger over the $6.48 million cash bonus he pocketed in the 2009 financial year. Especially with the company now set to announce a massively dilutive share raising.

In its latest accounts, prepared on a going concern basis, Lucas noted that its current liabilities exceeded its current assets by $114.7 million.

Lucas, which has seen its shares slump 80 per cent, reported "a range of options have been considered to strengthen the group balance sheet having regard to the multiple objectives of minimising shareholder dilution, deleveraging the balance sheet and preserving as far as possible ownership of the group's businesses".

Some investors will no doubt be eagerly awaiting the release of the group's remuneration report. Despite Campbell receiving no cash bonus last year after his 2009 windfall, he was still awarded $438,265 in options and a 27 per cent lift in base pay to $642,227. Campbell's base pay has tripled since 1999, the year before the accident-prone Lucas listed on the ASX.

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