A mathematical slip saw the value of metal at New Century Resources erroneously inflated by around US$4.8 billion in 2017, prominent mining investor Tolga Kumova said in court.
Under cross-examination in a defamation trial on Thursday, Mr Kumova admitted that a tweet he sent in September 2017 incorrectly claimed New Century’s deposits of zinc, lead and silver were “one big cash register” worth US$12 billion.
“$NCZ off to coordinate institutional site visit. US$12B of metal sitting behind me there. One big cash register by the time we’re done with it,” he wrote.
Barrister Dauid Sibtain, representing defendant Alan Francis Davison, said the tweet misled Mr Kumova’s social media followers who may have wanted to invest in New Century.
“It was highly misleading because it gave a value to a mineral resource and it got that value wrong by $4.8 billion,” Mr Sibtain said.
“Yes,” Mr Kumova replied.
Criticised for making the tweet at a time he was a director of New Century, the Melbourne rich lister acknowledged the error but said he had used publicly available information and was not in breach of his directorial duties.
Federal Court Justice Michael Lee, who is overseeing the case, noted that the GDP of the Maldives or Montenegro was also $4.8 billion.
The lawsuit accuses New Zealand-based Mr Davison of posting six defamatory tweets through his Stock Swami Twitter account accusing Mr Kumova of insider trading, misleading the market, and being part of a fraudulent “pump and dump” syndicate.
In his defence, Mr Davison has pleaded truth to some of the tweets, claiming that the mining entrepreneur misled the market through his own personal Twitter feed and interviews with the media.
On Thursday, Mr Kumova denied accusations he had engaged in pumping and dumping by using positive tweets to inflate the price of shares in companies he had invested in before selling that stock.
He said he had made positive tweets containing accurate information about firms he was proud of such as Bellevue Gold and had no intention of deceiving investors.
“Someone who pumps is trying to make an unorderly market … They’re trying to trick someone into buying a stock. Trick. Con,” he told the court.
The trillion dollar investment fund that was Bellevue Gold’s largest institutional investor could not be tricked or conned by a tweet, he said.
Mr Kumova said he had made bullish tweets regarding New Century and its funding in 2017 and 2018, but said he was confident about what he posted online. The tweets were well founded based on material published by the company on the Australian stock exchange, he told the court.
He admitted his tweets could potentially influence followers to buy certain stocks he had invested in, but rejected allegations that this was “pumping”.
He was unsure that the so-called Tolga Effect, in which his investment in mining companies caused their shares to rise, was a result of investors following his lead.
Instead, he claimed the share price rose because he had purchased a significant chunk of the firm’s shares, reducing the amount still available on the market.
A January 2021 interview by Stockhead with Mr Kumova which mentioned exploration firm Valor Resources saw the firm’s share price increase by 18.2 per cent within an hour, the court heard.
On Thursday, Justice Lee criticised Davison’s solicitors at Xenophon Davis for tweeting commentary on the case while Mr Kumova was giving evidence.
The barrister apologised to the court on behalf of the solicitors and said the tweet had been deleted.
The hearing continues Friday.