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CORPORATE

Corporate Governance

Share Trading Policy

1. OVERVIEW

1.1 Medusa Mining Limited (the "Company" or "Medusa") is a public company listed on the Australian Stock Exchange ("ASX") and is obliged to comply with the Corporations Act 2001 (the "Law") and the ASX Listing Rules (the "Listing Rules").

1.2 Whilst the Board encourages employees to own shares in the Company, it is also fully aware of the "insider trading" provisions that exists.

To avoid the possibility of any misconceptions, misunderstandings or suspicious conduct associated with employees trading in the Company shares, the Board resolved to adopt the following Policy.

1.3 The Policy on share trading will focus on:

(a) ensuring that all employees are aware of the "insider trading" laws: and

(b) implementation of a procedure ensuring that all transactions in the trading of Company shares comply with:

(i) the Law, in particular the insider trading prohibition contained in Section 1043A; and
(ii) any similar legislation in other countries in which Medusa may have future business dealings.

If you do not understand any part of this policy or how it applies to you, you should raise the matter with the CEO before trading in any shares covered by this Policy.

2. INSIDER TRADING LAWS

2.1 The Law, contain provisions which prohibit a person in possession of material non-public information relating to a company from dealing in any way with shares, options or other shares issued by that company or issued or created over the company's shares by third parties ("shares").

2.2 The principal insider trading prohibition is contained in section 1043A of the Law.
Section 1043A prohibits a person (an "insider") who is in possession of information relating to the Company that is not generally available but, if the information was generally available (see para 14.5), a reasonable person would expect that information to have a material effect (see para 14.6) on the price or value of Medusa shares ("material non-public information") from:

(a) applying for, acquiring, disposing of or entering into an agreement to apply for, acquire or dispose of Medusa shares;

(b) procuring another person to apply for, acquire, dispose of Medusa shares; or

(c) directly or indirectly communicating the material non-public information to another person when the insider knows, or ought reasonably to know, that the other person would or would be likely to:

(i) apply for, acquire, dispose of or enter into an agreement to apply for, acquire or dispose of Medusa shares; or
(ii) procure another person to apply for, acquire, dispose of or enter into an agreement to apply for, acquire or dispose of Medusa shares.

2.3 This offence known as "insider trading", is a criminal act and the offender is liable to large fines and/or imprisonment and also faces the possibility of civil action which may include being sued by another party or the Company, for any loss suffered as a result of the illegal trading.

2.4 The Company expects all employees to be bound by a sense and duty of confidentiality to the Company and as such, not to reveal/use any confidential information concerning the Company that may cause loss to the Company or to reveal/use any confidential information to gain an advantage for themselves or anyone else.

3. WHAT CONSTITUTES "INSIDE INFORMATION"

3.1 Inside information, is information that is:

(a) "price sensitive", meaning information relating to the Company, if the information were publicly known, be likely to:

  • have a material effect on the price or value of Medusa's shares; or

  • influence persons who commonly invest in shares in deciding whether or not to trade in Medusa shares; and

(b) not generally available.

Information is generally available if:

  • it consists of readily observable matter;

  • it has been made known in a manner likely to bring the information to the attention of the people who commonly invest in shares of a kind whose price or value might be affected by the information, and since it was made known, a reasonable period for it to be dessimated among such person has elapsed;

  • it is derived from information which has been made public; or

  • it consists of observations, deductions, conclusions or inferences made or drawn from generally available information.

3.2 It is immaterial how you come to know of the inside information, whether you learn it in the course of performing your duties, in the stairwell, in lifts, corridor or at a dinner party.

3.3 Whilst the financial impact of information is important, the strategic implications can be equally important in determining whether information is inside information.
The definition of information is broad enough to include rumours, matters of supposition, intentions and information which is not definite enough to warrant disclosure to the public.

3.4 Some illustrations of "inside information" include but are not limited to the following:

  • the financial performance of the Company against budget;

  • major acquisition or sale of assets by the Company;

  • execution of significant agreements (eg. major joint venture);

  • takeover or merger proposals;

  • changes to Company's capital structure;

  • declaration of dividends;

  • senior management changes;

  • drilling results of significance;

  • news of a claim against the Company or other unexpected liability.

4. PROHIBITATIONS OF INSIDER TRADING

4.1 If you possess inside information (irrespective of how it is obtained), you are prohibited from trading in the Company's shares, advising, procuring or enticing others to do likewise or passing on the information to others.

4.2 The prohibition on insider trading is not restricted to information concerning only the Company's shares. If the person has inside information in relation to shares of another Company, that person must not deal in those shares.

5. RESTRICTIONS IMPOSED BY COMPANY

5.1 All employees are restricted from trading in the Company's shares at least 10 days prior to the release of any Quarterly Reports by the Company, generally one month following the end of each calender quarter, ie 31 January, 30 April, 31 July and 31 October;

5.2 Before trading in the Company's shares, the employee must:

(a) notify the CEO of their intent to trade; and

(b) confirm that they are not aware of any inside information.

5.3 After receiving approval from the CEO to trade in the Company's shares, the employee must within 3 business days of consummating a trade, furnish the CEO details of the trade in the following manner:

(a) the name of the party trading the Company shares;

(b) whether the interest in the traded shares are held directly or indirectly;

(c) date of trade;

(d) number of shares bought and sold;

(e) amount of monies paid or received; and

(f) the number of shares held directly or indirectly, before and after the trade.

5.4 At no time may employees engage in active trading of the Company's shares with a view to deriving profit related income.

6. BREACH OF POLICY

6.1 Breaches of the Policy may result in disciplinary action against the employee, including dismissal in serious cases.

7. OTHER INFORMATION

7.1 You should read and familiarize yourself with this Policy.

7.2 If you have any questions relating to the interpretation or enforcement of this Policy, please direct your queries to either the CEO or Company Secretary.


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