Mount Burgess Faces Legal Hurdles Over Share Sale Compliance—What’s at Stake?

Background to the Court Application

Mount Burgess Mining N.L. has taken a significant step to address compliance issues related to its share placements over the past five years. The company has filed an application with the Supreme Court of Western Australia seeking remedial orders under section 1322 of the Corporations Act 2001. This move follows concerns about the timing and validity of cleansing notices associated with several share sales.

The application, lodged on 16 May 2025 and scheduled for hearing on 19 May 2025, requests the court to extend the time allowed for lodging cleansing notices, validate share sales made without valid notices, and relieve sellers from potential civil liabilities arising from these technical breaches.

Scope of the Share Sales and Placements

The application covers multiple share placements issued between July 2020 and April 2025, including:

• 30.7 million shares issued in July 2020
• 100 million shares issued in June 2022
• 132.5 million shares issued in August 2023
• 253.3 million shares issued in June 2024
• 12.2 million shares issued in April 2025

For each tranche, Mount Burgess seeks declarations that any sales of these shares during specified periods are not invalid due to failures in issuing cleansing notices. Additionally, the company requests relief for sellers from civil liability for non-compliance with disclosure obligations under the Corporations Act.

Implications for Shareholders and the Market

This application is a critical step for Mount Burgess Mining to regularize past share transactions and provide certainty to shareholders and market participants. Without these orders, sellers of shares during the relevant periods could face legal challenges or liabilities, potentially undermining investor confidence.

The company has invited shareholders and any other potentially affected parties to appear before the court or contact its legal representatives for further information. This openness suggests Mount Burgess is keen to manage the situation transparently and mitigate any reputational risks.

Regulatory and Legal Context

The remedial orders sought hinge on the court’s discretion under section 1322 of the Corporations Act, which allows for validation of defective transactions and relief from liability in appropriate circumstances. The complexity arises from the interplay between cleansing notices, disclosure obligations, and the timing of share sales.

Mount Burgess’s legal team, led by Thomson Geer, will argue that the technical breaches were inadvertent and that granting the orders serves the interests of justice and market integrity. The Australian Securities and Investments Commission (ASIC) and ASX Limited are also notified parties, underscoring the regulatory significance of the matter.

Looking Ahead

The outcome of the hearing on 19 May will be closely watched by investors and legal observers alike. Should the court grant the orders, it would effectively clear the way for Mount Burgess to move forward without the overhang of past compliance uncertainties. Conversely, any refusal or modification of the orders could trigger further legal and market repercussions.