IN THE MATTER OF GOLD DIG LTD

Order Description
IN THE MATTER OF GOLD DIG LTD

Gold Dig Ltd was incorporated on January 2012 and was floated on the ASX in March 2012. The company raised $100 million from investors. Gold Dig Ltd is primarily involved in mining and exploration activities located in the Pilbara region of Western Australia.

Gold Dig Ltd has four directors:- Apollo, Rocky, Drago and Clubber. Both Apollo and Rocky are executive directors. Rocky is the company’s chief executive officer. Clubber is the company’s Chairman. Drago is the company’s chief financial officer.

Gold Dig Ltd began exploration activities in July 2012. After drilling a number of sites, a geological survey was commissioned and the results from the mine wells were tested. The results from the geological survey reveal that the mining site has low levels of gold deposits and is considered to be not economically viable. The company has already spent $5 million undertaking exploration.

At a recent meeting in June 2014, the board of directors considers whether to abandon its mining activities and return the company’s remaining capital back to its shareholders. Both Apollo and Rocky are eternal optimists and never know when to quit. They both argue that the company is on the verge of a major discovery and should continue with its exploration activities. Clubber and Drago are less optimistic and suggest that the company’s remaining capital should be returned back to investors. To avoid another heated confrontation, Clubber and Drago agree with Rocky and Apollo that the company should continue with its drilling program. At the completion of the drilling activities in 2014 all of the company’s capital has been exhausted and there have been no major discoveries.

QUESTIONS

GROUP 3 & 4:- CAN THE AGGRIEVED SHAREHOLDERS RECOVER THEIR INITIAL INVESTMENT BY COMMENCING AN ACTION AGAINST THE COMPANY OR ANY OF ITS DIRECTORS?