Billionaires’ $12m railway row
14th August 2007, 6:00 WST
Billionaires Len Buckeridge and Andrew Forrest have fallen out in a multi-million-dollar dispute over the railway line destined to open up the Pilbara and break the iron ore stranglehold held by mining giants BHP Billiton and Rio Tinto. Mr Buckeridge’s BGC Contracting has issued a writ in the WA Supreme Court claiming $12.35 million from a subsidiary of Mr Forrest’s Fortescue Metals Group, which is racing against time to complete its 260km railway line to ship its first iron ore to Chinese buyers in May next year. That ambitious deadline represents a critical milestone for Fortescue’s $2.9 billion iron ore project, which ultimately aims to export 200 million tonnes of iron ore a year from a new port it is building at Port Hedland. Mr Buckeridge said yesterday that while cyclones had delayed progress on the railway line and contributed to cost blowouts, he could not be held responsible. “My name’s Len, not God, I didn’t cause the cyclones,” Mr Buckeridge said. BGC was the sole contractor carrying out the earthworks for the railway line until the two Perth billionaires personally struck a deal on May 30 which allowed Fortescue to bring in two extra contractors to help make up for the lost time caused by three cyclones. According to the statement of claim lodged by BGC with its writ, Fortescue agreed to pay a fee of at least $12.35 million to Mr Buckeridge’s company as part of a deed to terminate their original contract, with a further claim of $6.4 million to be settled via arbitration. However, the writ stated that in a letter dated July 11, Mr Forrest informed Mr Buckeridge “that the defendant would not be paying the fee to the plaintiff” without giving any reasons. It stated that when Mr Buckeridge -demanded Mr Forrest release the dispute fee from a trust account during a telephone call on August 2, the Fortescue chief refused. Mr Buckeridge’s lawyers filed the writ in the Supreme Court the next day. While Mr Forrest could not be reached for comment yesterday, Fortescue executive director Graeme Rowley said the legal action taken by Mr Buckeridge would not delay progress on the line, even though BGC continued to work on the project. Mr Rowley said the writ was the first dispute Fortescue had experienced in $2.9 billion worth of contracts issued to build the company’s rail, port and iron ore mine. “We push all our contractors for value, that’s always been our focus and we will continue to do that,” Mr Rowley said. “And if you’re going to keep pushing your contractors for value, then you’re not always going to see eye to eye with them.” He said Fortescue hoped to reach a negotiated settlement out-of-court with BGC.
MARK DRUMMOND CHIEF REPORTER
http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=37293
Showing posts with label Andrew Forrest. Show all posts
Showing posts with label Andrew Forrest. Show all posts
Wednesday, August 15, 2007
Monday, July 16, 2007
Twiggy pitches to Packer, Indians
Twiggy pitches to Packer, Indians
Kevin Andrusiak July 14, 2007
FORTESCUE Metals Group is poised to pull off one of the biggest investment coups in domestic resources history.
James Packer and Indian interests are set to back Andrew "Twiggy" Forrest's dream of breaking the Pilbara iron ore duopoly held by Rio Tinto and BHP Billiton.
Mr Forrest was expected to give Mr Packer, Australia's richest man, a private briefing on Fortescue's ambitions in London last night as the company sought to raise $US300 million ($346 million) in new equity to partly fund a dramatic expansion of its $3.7 billion Chichester Ranges project in Western Australia's iron ore heartland.
It comes after Mr Forrest toured London financial institutions spruiking the new equity placement on Thursday and Friday.
Mr Forrest will also promote the placement to billionaire metals traders David and Simon Reuben who are collectively thought to be worth $11 billion. The pair once controlled about 50 per cent of the Russian aluminium industry before selling out in 2000 to concentrate on Britain's property market.
But Mr Forrest's expected meetings with Arcelor Mittal representatives, possibly company president and steel magnate Lakshmi Mittal, would mark a dramatic development for Fortescue, which previously has been dedicated solely to the Chinese market.
Arcelor Mittal, which has headquarters in Luxembourg and is controlled by Mr Mittal, the world's fifth-richest man, trumpets itself as the world's most global steel company but is yet to make a mark on the booming Australia iron ore landscape. It is understood that Mr Mittal is seeking an offtake arrangement with Fortescue, which has targeted a production rate of 45 million tonnes a year, before ramping that up to 100 million tonnes by 2010 and 200 million tonnes a year "as soon as possible".
That would put Fortescue on a similar tier to iron ore heavyweights Rio Tinto and BHP Billiton as it eyes an expansion of known resources to 4 billion tonnes across its 40,000sqkm of tenements.
FMG representatives could not be reached for comment but the company could have easily placed the $US300 million with London firms, according to sources close to the deal. So strong is the interest in London, coming off the back of Rio Tinto's $US37.1 billion bid for Alcan and a mooted 25 per cent rise in iron ore price contracts for next year, that there is a good chance the equity placement will be increased to around $US450 million.
It is expected the shares will be placed at around the $37.00 mark, which will effectively put a floor price under the stock -- of which Mr Forrest currently owns about 38.5 per cent.
A fully placed $300 million offering at $37 would see about 9.3 million new shares issued and have only a marginal dilutionary effect.
"If James Packer doesn't take any stock, I will walk home from London," one insider said.
Mr Forrest, who himself has a paper fortune of $4.05 billion from his Fortescue stake, has developed a close personal friendship. He was placed near the front row in seating at Mr Packer's nuptials to model Erica Baxter in France last month.
Mr Packer has also had a personal tour of Fortescue's operations, which remain on track to deliver their first direct ore shipment in May next year, if contractors can build a 260km railway line to its Port Hedland facilities.
Fortescue's shares remained in a trading halt yesterday at $39.50.
http://www.theaustralian.news.com.au/story/0,24897,22070664-643,00.html
Kevin Andrusiak July 14, 2007
FORTESCUE Metals Group is poised to pull off one of the biggest investment coups in domestic resources history.
James Packer and Indian interests are set to back Andrew "Twiggy" Forrest's dream of breaking the Pilbara iron ore duopoly held by Rio Tinto and BHP Billiton.
Mr Forrest was expected to give Mr Packer, Australia's richest man, a private briefing on Fortescue's ambitions in London last night as the company sought to raise $US300 million ($346 million) in new equity to partly fund a dramatic expansion of its $3.7 billion Chichester Ranges project in Western Australia's iron ore heartland.
It comes after Mr Forrest toured London financial institutions spruiking the new equity placement on Thursday and Friday.
Mr Forrest will also promote the placement to billionaire metals traders David and Simon Reuben who are collectively thought to be worth $11 billion. The pair once controlled about 50 per cent of the Russian aluminium industry before selling out in 2000 to concentrate on Britain's property market.
But Mr Forrest's expected meetings with Arcelor Mittal representatives, possibly company president and steel magnate Lakshmi Mittal, would mark a dramatic development for Fortescue, which previously has been dedicated solely to the Chinese market.
Arcelor Mittal, which has headquarters in Luxembourg and is controlled by Mr Mittal, the world's fifth-richest man, trumpets itself as the world's most global steel company but is yet to make a mark on the booming Australia iron ore landscape. It is understood that Mr Mittal is seeking an offtake arrangement with Fortescue, which has targeted a production rate of 45 million tonnes a year, before ramping that up to 100 million tonnes by 2010 and 200 million tonnes a year "as soon as possible".
That would put Fortescue on a similar tier to iron ore heavyweights Rio Tinto and BHP Billiton as it eyes an expansion of known resources to 4 billion tonnes across its 40,000sqkm of tenements.
FMG representatives could not be reached for comment but the company could have easily placed the $US300 million with London firms, according to sources close to the deal. So strong is the interest in London, coming off the back of Rio Tinto's $US37.1 billion bid for Alcan and a mooted 25 per cent rise in iron ore price contracts for next year, that there is a good chance the equity placement will be increased to around $US450 million.
It is expected the shares will be placed at around the $37.00 mark, which will effectively put a floor price under the stock -- of which Mr Forrest currently owns about 38.5 per cent.
A fully placed $300 million offering at $37 would see about 9.3 million new shares issued and have only a marginal dilutionary effect.
"If James Packer doesn't take any stock, I will walk home from London," one insider said.
Mr Forrest, who himself has a paper fortune of $4.05 billion from his Fortescue stake, has developed a close personal friendship. He was placed near the front row in seating at Mr Packer's nuptials to model Erica Baxter in France last month.
Mr Packer has also had a personal tour of Fortescue's operations, which remain on track to deliver their first direct ore shipment in May next year, if contractors can build a 260km railway line to its Port Hedland facilities.
Fortescue's shares remained in a trading halt yesterday at $39.50.
http://www.theaustralian.news.com.au/story/0,24897,22070664-643,00.html
Saturday, July 7, 2007
Fortescue founder shrugs off concerns
Fortescue founder shrugs off concerns
Australian Broadcasting Corporation
Broadcast: 04/07/2007
Reporter: Emma Alberici
The share price of Fortescue Metals continues to rocket, even though the company has not yet exported its main product, iron ore, and a cost blow-out is delaying the project. Company founder Andrew Forrest discusses Fortescue's prospects with Lateline Business host Emma Alberici.
Transcript
EMMA ALBERICI: The miners were really the star performers today. Two years almost to the day, Fortescue Metals was trading on the stock market at $2.87. The share price closed today at about 13 times that, at $36.25 - this despite the fact that the company is still yet to produce or ship one tonne of iron ore. The company has spent the past three years building a mine in the Pilbara in Western Australia. Just last week, it was revealed that a cost blow-out would delay the project and then there's Fortescue founder Andrew Forrest, whose failed Anaconda Nickel project has many analysts nervous about the viability of his ambitions in the Pilbara. His credibility will be tested further at the end of this month ,when court proceedings start in the case the corporate regulator is running against him on claims he misled the market about the state of his contracts to sell iron ore to the Chinese. I caught up with Andrew Forrest earlier today.
Andrew Forrest, welcome to Lateline Business. What can you tell us about the latest delays to your project?
ANDREW FORREST: Well, you're looking at about a four-year implementation program of this project, which in the Pilbara has normally taken between 12 and 15 years. So while the pressure is intense here in Fortescue to get the project up as quickly as possible, from where the most effect is felt, which is our customers, they're just saying, 'We're so grateful for your effort thus far, bring it on as quick as you can but don't break your back in the process'.
EMMA ALBERICI: So what is the production schedule now?
ANDREW FORREST: We hope to be ramping up to 3 to 4 million tonnes a month within 12 months of commencing production. We'll be commencing production in the first half of next year and that will be then steadily moved up to around 10 million tonnes per month to an ultimate goal of 200 million tonnes out of the Port Hedland port area and out of the massive iron ore hinterland of the Pilbara.
EMMA ALBERICI: How confident are you that you won't run into further delays?
ANDREW FORREST: You can never say never when you're doing large scale construction. I've had a lot of experience in this industry and there are disappointments and pit falls and if there weren't, then leadership would really be out of a job. It's our job to manage our way through this and still achieve this massive ground-breaking Australian project in absolute record time. And if we can bring it on any time next year, then we'd have achieved that. But we are confident, very confident we'll bring it on in the first half of next year.
EMMA ALBERICI: How many contracts have you actually signed with the Chinese?
ANDREW FORREST: We have long-term contracts with 34 different companies.
EMMA ALBERICI: Are those contracts predicated on a particular delivery date? And what other conditions are built into them?
ANDREW FORREST: Each contract talks about 45 million tonnes in percentage terms. So if for any reason we were late, then there'd be no chance of harm coming to the company. We've been very careful with that and of course, that is one of the reasons why this project was so bankable, that the bankers could see that the downside of delays was very well-managed and to bring this project on in the first half of next year from a perspective of the customer, there's been no effective delays. They're very pleased with that result.
EMMA ALBERICI: When will Fortescue actually turn a profit?
ANDREW FORREST: I think within months of our first ship sailing, you'll get Fortescue in profit. The very difficult part, Emma, about the iron ore industry on a world-scale basis is getting into it. The barriers to entry are immense. You need billions of dollars, you need billions of tonnes, you need friendly sovereign government regimes, you need huge work forces. Now, we've been able to put all that together. Once you're in, you begin to see why the barriers to entry are so large and that is it's a very profitable industry. It's the very industry which has created the balance sheets and created the fortunes of not one but three of the world's largest mining companies: BHP, Rio Tinto and CVRD.
EMMA ALBERICI: When we talk about delays and cost overruns, those with long memories in the markets fear it could be history repeating itself. Anaconda Nickel, now known as Minara Resources, suffered cost blow-outs and delays under your leadership, with creditors in the end left with little more than 20 cents in the dollar.
ANDREW FORREST: Anaconda is really much-maligned. Minara Resources enjoys one of the most efficient, high-quality nickel-producing facilities in the world right now. It is a tremendous operation. It is certainly the pride of anyone who ever goes out and sees it. When Glencore, which is an international, hard-nosed juggernaut, took over our company, we left it with a couple hundred million dollars cash at bank and we left it with a strongly growing production profile. But that didn't suit Glencore. They didn't want the good news out there. It was very much in their interest to talk the company down, to malign its interest publicly and it was a full year before they were able to achieve a cascading down share price and eventually buy the debt back and try and buy the company for a fraction of what it was worth a year earlier when my team ran the company. But the experience there for me was irreplaceable. That was very hard yards and I'm grateful for that experience. I certainly couldn't have got it from Harvard or an institution. You have to go through those fires to really be able to plan for a major project like Fortescue and you will look around Fortescue and you will see a highly cooperative environment with all it's contractors, very few lump-sum contracts and certainly no overarching lump-sum contracts, and that really epitomises Fortescue, where we've been able to build strong bridge relationships with all our stakeholders and particularly our contractors. We're all incentivated to get this project ramped up to 45 million tonnes as quickly as possible.
EMMA ALBERICI: Why did you seek all your funding for Fortescue from overseas?
ANDREW FORREST: When you put on a multi-billion-dollar capital-raising like Fortescue took and the institutions and the banks are getting their information on Fortescue, their background information from the very competitors trying to keep Fortescue out, BHP and Rio Tinto, then you can understand what they'd develop a reasonably pessimistic opinion of BHP and Rio Tinto's most dangerous competitor in their most profitable field, which is Pilbara iron ore. Now unfortunately, that's what the banks and that's what the institutions went on, and they've of course paid dearly for that because the share price has gone up several times. And unfortunately those institutions are now coming onto the register, and we'd have loved to have had them on earlier but there's still enormous growth for them to participate in now.
EMMA ALBERICI: In two weeks, you'll front court in the corporate regulator's case against you. ASIC says you misled the market by claiming to have contracts signed which they say actually weren't. You could be banned from being a director of Fortescue or any other company. How are you feeling about that?
ANDREW FORREST: We have looked at that philosophically. It has been another rock in the backpack of getting this project up. I think it has cost the company and its major stakeholders in a very real sense. We dealt with highly sophisticated international business people who flagged they were going to pull out of agreements with us unless we sold them the company. We weren't interested in selling them the company and of course, that judgement has been vindicated several times over, over the last two or three years, and they went ahead and threatened to pull out of those agreements and it cost us a great deal of time. But the ASIC attention, as a result of that, will lead to our day in court and I can fairly say to you we are all, not just me, but we're all looking forward to our day in court.
EMMA ALBERICI: Andrew Forrest, thanks for joining us this evening.
ANDREW FORREST: Thanks very much, Emma.
http://www.abc.net.au/lateline/business/items/200707/s1969510.htm
http://www.abc.net.au/reslib/200707/r157307_570080.asx
Australian Broadcasting Corporation
Broadcast: 04/07/2007
Reporter: Emma Alberici
The share price of Fortescue Metals continues to rocket, even though the company has not yet exported its main product, iron ore, and a cost blow-out is delaying the project. Company founder Andrew Forrest discusses Fortescue's prospects with Lateline Business host Emma Alberici.
Transcript
EMMA ALBERICI: The miners were really the star performers today. Two years almost to the day, Fortescue Metals was trading on the stock market at $2.87. The share price closed today at about 13 times that, at $36.25 - this despite the fact that the company is still yet to produce or ship one tonne of iron ore. The company has spent the past three years building a mine in the Pilbara in Western Australia. Just last week, it was revealed that a cost blow-out would delay the project and then there's Fortescue founder Andrew Forrest, whose failed Anaconda Nickel project has many analysts nervous about the viability of his ambitions in the Pilbara. His credibility will be tested further at the end of this month ,when court proceedings start in the case the corporate regulator is running against him on claims he misled the market about the state of his contracts to sell iron ore to the Chinese. I caught up with Andrew Forrest earlier today.
Andrew Forrest, welcome to Lateline Business. What can you tell us about the latest delays to your project?
ANDREW FORREST: Well, you're looking at about a four-year implementation program of this project, which in the Pilbara has normally taken between 12 and 15 years. So while the pressure is intense here in Fortescue to get the project up as quickly as possible, from where the most effect is felt, which is our customers, they're just saying, 'We're so grateful for your effort thus far, bring it on as quick as you can but don't break your back in the process'.
EMMA ALBERICI: So what is the production schedule now?
ANDREW FORREST: We hope to be ramping up to 3 to 4 million tonnes a month within 12 months of commencing production. We'll be commencing production in the first half of next year and that will be then steadily moved up to around 10 million tonnes per month to an ultimate goal of 200 million tonnes out of the Port Hedland port area and out of the massive iron ore hinterland of the Pilbara.
EMMA ALBERICI: How confident are you that you won't run into further delays?
ANDREW FORREST: You can never say never when you're doing large scale construction. I've had a lot of experience in this industry and there are disappointments and pit falls and if there weren't, then leadership would really be out of a job. It's our job to manage our way through this and still achieve this massive ground-breaking Australian project in absolute record time. And if we can bring it on any time next year, then we'd have achieved that. But we are confident, very confident we'll bring it on in the first half of next year.
EMMA ALBERICI: How many contracts have you actually signed with the Chinese?
ANDREW FORREST: We have long-term contracts with 34 different companies.
EMMA ALBERICI: Are those contracts predicated on a particular delivery date? And what other conditions are built into them?
ANDREW FORREST: Each contract talks about 45 million tonnes in percentage terms. So if for any reason we were late, then there'd be no chance of harm coming to the company. We've been very careful with that and of course, that is one of the reasons why this project was so bankable, that the bankers could see that the downside of delays was very well-managed and to bring this project on in the first half of next year from a perspective of the customer, there's been no effective delays. They're very pleased with that result.
EMMA ALBERICI: When will Fortescue actually turn a profit?
ANDREW FORREST: I think within months of our first ship sailing, you'll get Fortescue in profit. The very difficult part, Emma, about the iron ore industry on a world-scale basis is getting into it. The barriers to entry are immense. You need billions of dollars, you need billions of tonnes, you need friendly sovereign government regimes, you need huge work forces. Now, we've been able to put all that together. Once you're in, you begin to see why the barriers to entry are so large and that is it's a very profitable industry. It's the very industry which has created the balance sheets and created the fortunes of not one but three of the world's largest mining companies: BHP, Rio Tinto and CVRD.
EMMA ALBERICI: When we talk about delays and cost overruns, those with long memories in the markets fear it could be history repeating itself. Anaconda Nickel, now known as Minara Resources, suffered cost blow-outs and delays under your leadership, with creditors in the end left with little more than 20 cents in the dollar.
ANDREW FORREST: Anaconda is really much-maligned. Minara Resources enjoys one of the most efficient, high-quality nickel-producing facilities in the world right now. It is a tremendous operation. It is certainly the pride of anyone who ever goes out and sees it. When Glencore, which is an international, hard-nosed juggernaut, took over our company, we left it with a couple hundred million dollars cash at bank and we left it with a strongly growing production profile. But that didn't suit Glencore. They didn't want the good news out there. It was very much in their interest to talk the company down, to malign its interest publicly and it was a full year before they were able to achieve a cascading down share price and eventually buy the debt back and try and buy the company for a fraction of what it was worth a year earlier when my team ran the company. But the experience there for me was irreplaceable. That was very hard yards and I'm grateful for that experience. I certainly couldn't have got it from Harvard or an institution. You have to go through those fires to really be able to plan for a major project like Fortescue and you will look around Fortescue and you will see a highly cooperative environment with all it's contractors, very few lump-sum contracts and certainly no overarching lump-sum contracts, and that really epitomises Fortescue, where we've been able to build strong bridge relationships with all our stakeholders and particularly our contractors. We're all incentivated to get this project ramped up to 45 million tonnes as quickly as possible.
EMMA ALBERICI: Why did you seek all your funding for Fortescue from overseas?
ANDREW FORREST: When you put on a multi-billion-dollar capital-raising like Fortescue took and the institutions and the banks are getting their information on Fortescue, their background information from the very competitors trying to keep Fortescue out, BHP and Rio Tinto, then you can understand what they'd develop a reasonably pessimistic opinion of BHP and Rio Tinto's most dangerous competitor in their most profitable field, which is Pilbara iron ore. Now unfortunately, that's what the banks and that's what the institutions went on, and they've of course paid dearly for that because the share price has gone up several times. And unfortunately those institutions are now coming onto the register, and we'd have loved to have had them on earlier but there's still enormous growth for them to participate in now.
EMMA ALBERICI: In two weeks, you'll front court in the corporate regulator's case against you. ASIC says you misled the market by claiming to have contracts signed which they say actually weren't. You could be banned from being a director of Fortescue or any other company. How are you feeling about that?
ANDREW FORREST: We have looked at that philosophically. It has been another rock in the backpack of getting this project up. I think it has cost the company and its major stakeholders in a very real sense. We dealt with highly sophisticated international business people who flagged they were going to pull out of agreements with us unless we sold them the company. We weren't interested in selling them the company and of course, that judgement has been vindicated several times over, over the last two or three years, and they went ahead and threatened to pull out of those agreements and it cost us a great deal of time. But the ASIC attention, as a result of that, will lead to our day in court and I can fairly say to you we are all, not just me, but we're all looking forward to our day in court.
EMMA ALBERICI: Andrew Forrest, thanks for joining us this evening.
ANDREW FORREST: Thanks very much, Emma.
http://www.abc.net.au/lateline/business/items/200707/s1969510.htm
http://www.abc.net.au/reslib/200707/r157307_570080.asx
Wednesday, June 13, 2007
Iron ore boom to roll on
Iron ore boom to roll on
12th June 2007, 7:15 WST
The good times for Australian iron ore miners are set to keep rolling at least until the end of the decade, as Chinese demand shows no sign of slowing.
According to the latest research by US investment bank Citigroup, iron ore prices are expected to rise at least 20 per cent over the next two years and could rise that amount next year alone.
“Tight market conditions are expected to prevail over the next two years, pointing to a 20 per cent increases in prices, however, there are a number of additional considerations lending further price support in the shorter term,” Citigroup said.
“We have taken the view therefore that producers will front-load the price increase (and) now expect prices to increase 20 per cent in 2008-09 and to be flat the year after.”
Citigroup’s revised forecast follows upgrades by fellow banks UBS and Goldman Sachs pointing to cumulative rises of 10 to15 per cent over the next two years.
Should Citigroup’s predictions prove correct and a sixth consecutive increase is agreed in price talks for next year, prices will have risen more than threefold since they last fell in 2002.
Premium Pilbara lump ore was then fetching around $US23 a tonne, while another 20 per cent increase next year would boost the price to around $US80/tonne.
At the same time, official figures from China have shown that Beijing’s efforts to slow its rampant economy and ease domestic inflation are having minimal effect.
Iron ore imports jumped sharply to just over 100 million tonnes in the March quarter, keeping the full year total on track to rise 20 per cent to a record 400 million tonnes this year.
“I can definitely say it (the price) is going up,” Fortescue Metals Group chief Andrew Forrest said on Friday.
“There is an unstoppable force about the demand from the steel industry and the failure of infrastructure to supply it.”
That imbalance has already sparked a desperate Chinese response to gain greater sway over future negotiations and supplies.
With Beijing’s approval, individual Chinese steel companies have been aggressively investing in new mines around the world for several years.
Last week, four of China’s biggest steelmakers — AnSteel, Baosteel, Shougang Steel and Wuhan Iron & Steel — formally launched a dedicated joint investment vehicle to acquire foreign resources.
The company, Beijing Steel Industry United Mining Resources, would improve Chinese steelmakers’ control over supply, AnSteel said.
AnSteel, which is already a partner in Gindalbie Metals’ planned $1 billion Karara magnetite project east of Geraldton, said control of iron ore supplies had “for too long been in other people’s hands”, in turn creating “market instability”.
“Steelmakers who don’t have their own iron ore resources will not survive,” Wuhan said in a statement.
The new company’s initial venture will be at Preah Vihear in Cambodia.
Aside from Karara, Chinese companies are already backing new WA mines in the Pilbara at Cape Preston, Balmoral and Cape Lambert, and in the Mid-West at Koolanooka, Weld Range and Extension Hill.
JOHN PHACEAS
http://www.thewest.com.au/printfriendly.aspx?ContentID=31132
Monday, June 4, 2007
Forrest racks up profit as Niagara eyes switch
Forrest racks up profit as Niagara eyes switch
2nd June 2007, 12:00 WST
Niagara Mining is pushing ahead with a plan to re-brand itself with the historic name Poseidon Nickel as part of moves that have produced more than $100 million in paper profits for billionaire Andrew Forrest and small fortunes for other diehard supporters.
Subiaco-based Niagara will next month seek shareholder approval for the name change and the appointment of Mr Forrest to its board.
Shareholders will also be asked to back the issue of 115 million options with a conversion price of 40¢ to Mr Forrest.
With Niagara shares having risen more than five-fold since Mr Forrest’s plans to join the company were unveiled last month and the stock closing at $1.37 yesterday, the Fortescue Metals boss is already $112 million in the black on the stock.
The proposed name change to Poseidon, backed by Mr Forrest, harks back to the nickel boom in the early 1970s when the Mt Windarra nickel project and its then owner Poseidon were the market’s hottest news.
Niagara bought the dormant Mt Windarra project four years ago and its chief executive, former stockbroker Chris Daws, began working to revive the project and explore surrounding tenements.
Mr Daws is the son of the company’s chairman Doug Daws and the grandson of legendary former Boulder Shire president Charles Daws.
Niagara gained the support of Windarra enthusiasts including former Eyres Reed stockbroker Jeff Verheggen and Stirling Lions Soccer Club chairman Don Evans. Stirling Lions is closely affiliated with the northern suburbs Macedonian community, members of which have invested heavily in Niagara.
Market sources said Mr Verheggen’s family connections had made around $30 million from backing Mr Daws’ vision for a mining revival at Mt Windarra. Friends and business associates of Mr Evans and Mr Verheggen have enjoyed big profits.
Papers for the July 2 shareholder meeting reveal that West Perth corporate advisory group RM Capital is also about to be richly rewarded for its long-standing support.
Niagara is seeking approval for RM, which is headed by corporate adviser James Richardson and former stockbroker Guy Le Page, to be issued six million Niagara options at a strike price of 40¢.
Mr Daws said the options deal with RM was struck early this year before the Forrest-inspired run in Niagara shares and recognised significant amounts of unpaid work performed by the group.
Mr Forrest’s support and cash flow into the group had allowed it to recruit former senior Jubilee Mines geologist Neil Hutchison to oversee the group’s exploration activities.
Mr Daws said it was time to step down and for Mr Forrest to install a new management group. “I am handing over to Andrew and his team, whoever that might be,” he said. The notice of meeting shows experts from BDO have found the proposed options issue to Mr Forrest to be fair and reasonable despite the potential dilution that could see the billionaire own 41 per cent of Niagara in return for $47 million cash.
“Mr Forrest possesses a wealth of knowledge and experience in resources in Australia,” BDO said.
“In addition, Mr Forrest can bring a number of contacts and relationships that may assist Niagara in achieving its objectives.”
NEALE PRIOR
http://www.thewest.com.au/printfriendly.aspx?ContentID=30378
2nd June 2007, 12:00 WST
Niagara Mining is pushing ahead with a plan to re-brand itself with the historic name Poseidon Nickel as part of moves that have produced more than $100 million in paper profits for billionaire Andrew Forrest and small fortunes for other diehard supporters.
Subiaco-based Niagara will next month seek shareholder approval for the name change and the appointment of Mr Forrest to its board.
Shareholders will also be asked to back the issue of 115 million options with a conversion price of 40¢ to Mr Forrest.
With Niagara shares having risen more than five-fold since Mr Forrest’s plans to join the company were unveiled last month and the stock closing at $1.37 yesterday, the Fortescue Metals boss is already $112 million in the black on the stock.
The proposed name change to Poseidon, backed by Mr Forrest, harks back to the nickel boom in the early 1970s when the Mt Windarra nickel project and its then owner Poseidon were the market’s hottest news.
Niagara bought the dormant Mt Windarra project four years ago and its chief executive, former stockbroker Chris Daws, began working to revive the project and explore surrounding tenements.
Mr Daws is the son of the company’s chairman Doug Daws and the grandson of legendary former Boulder Shire president Charles Daws.
Niagara gained the support of Windarra enthusiasts including former Eyres Reed stockbroker Jeff Verheggen and Stirling Lions Soccer Club chairman Don Evans. Stirling Lions is closely affiliated with the northern suburbs Macedonian community, members of which have invested heavily in Niagara.
Market sources said Mr Verheggen’s family connections had made around $30 million from backing Mr Daws’ vision for a mining revival at Mt Windarra. Friends and business associates of Mr Evans and Mr Verheggen have enjoyed big profits.
Papers for the July 2 shareholder meeting reveal that West Perth corporate advisory group RM Capital is also about to be richly rewarded for its long-standing support.
Niagara is seeking approval for RM, which is headed by corporate adviser James Richardson and former stockbroker Guy Le Page, to be issued six million Niagara options at a strike price of 40¢.
Mr Daws said the options deal with RM was struck early this year before the Forrest-inspired run in Niagara shares and recognised significant amounts of unpaid work performed by the group.
Mr Forrest’s support and cash flow into the group had allowed it to recruit former senior Jubilee Mines geologist Neil Hutchison to oversee the group’s exploration activities.
Mr Daws said it was time to step down and for Mr Forrest to install a new management group. “I am handing over to Andrew and his team, whoever that might be,” he said. The notice of meeting shows experts from BDO have found the proposed options issue to Mr Forrest to be fair and reasonable despite the potential dilution that could see the billionaire own 41 per cent of Niagara in return for $47 million cash.
“Mr Forrest possesses a wealth of knowledge and experience in resources in Australia,” BDO said.
“In addition, Mr Forrest can bring a number of contacts and relationships that may assist Niagara in achieving its objectives.”
NEALE PRIOR
http://www.thewest.com.au/printfriendly.aspx?ContentID=30378
Thursday, May 17, 2007
Forrest gets his nickel in Niagara deal
Forrest gets his nickel in Niagara deal
Kevin Andrusiak
May 17, 2007
THE honeymoon between junior nickel explorer Niagara Mining and the Andrew "Twiggy" Forrest-run Fortescue Mining continues to blossom with Niagara promising to give up all future nickel marketing rights to Fortescue for an undisclosed sum.Niagara signed a deal with Fortescue yesterday effectively giving Fortescue access to any nickel that Niagara produces from its Windarra project in the West Australian Goldfields.
It comes six weeks after Mr Forrest joined the minnow as chairman.
The tie-up between the two companies gave Niagara access to diamond drill rigs not previously available.
Mr Forrest took 5.5 million Niagara shares and 117.5 million post-consolidation options, which range in exercise price from 40c to $1.
Fortescue is gearing up to produce 45 million tonnes of iron ore from its Chichester Ranges project in the Pilbara, and Mr Forrest believes nickel, which is also in short supply in global markets, is a logical move for Fortescue.
Fortescue now becomes the "exclusive agent" for all marketing services for Niagara nickel.
Niagara chief executive Chris Daws said negotiations over the marketing rights had been going on for weeks, but their confidential nature meant it could not release details when questioned by the Australian Securities Exchange over a share price spike on Monday.
The share price rise was later attributed to institutional buying.
Mr Daws added that while Fortescue would get the lucrative nickel marketing rights, Niagara would receive less tangible benefits.
"Our value is in the strategic alliance with Fortescue," Mr Daws said.
"We will get access to things like human resources, to contracting and engineering services - we are paying for things like that through the marketing rights."
Niagara is trying to revive Windarra, which was the scene of one of the most infamous periods in Australian mining history - the Poseidon boom and bust.
Windarra yielded 128,000 tonnes of nickel during the 17 years WMC Resources worked the mine until its close in 1991 because of flagging nickel prices. New technology has reinvigorated both the underground and open pit workings at Windarra, and Niagara claims to have discovered five to six "high priority" anomalies.
Fortescue's access to marketing rights, while totally dependent on any nickel production, is also subject to a reorganisation of the Fortescue board.
Mr Forrest will take over as chairman from current occupant Doug Daws, while Chris Indermaur, one of the key players in the controversial and failed management buyout attempt of Alinta, has also been nominated to join.
A shareholders meeting to ratify all the changes is expected to be held in mid-June.
Niagara shares gained 12c to $1.51 while Fortescue stock added $1.20 to $33.50.
Thursday, April 26, 2007
Poseidon ready to arise from grave
Poseidon ready to arise from grave
26th April 2007, 6:00 WST
Nearly 40 years after one of Australia’s biggest share price runs, the Poseidon name could soon return to the stock exchange trading boards if billionaire entrepreneur Andrew Forrest gets his way. Niagara Mining, which recently appointed Mr Forrest as chairman, is giving serious consideration to a name change to Poseidon, which is synonymous with the nickel boom of the 1970s. Niagara reserved the names Poseidon Nickel Mines and Poseidon Mines more than two years ago. The explorer also has a strong claim on the name through its control of the mothballed Windarra mine, near Laverton, which underpinned the original Poseidon. Niagara chairman Doug Daws said that, despite its decision to reserve the Poseidon name, the group had not considered a name change until Mr Forrest came on board earlier this month. “Andrew has a different vision to us and he has made it clear that it is some thing that he wishes to give consideration to,” Mr Daws said. “I think it is a sensational name, a name that is known around the world and is synonymous with the great nickel boom we had in Australia. Niagara is a good name but Poseidon is potentially a much better name.” Poseidon prospector Ken Shirley discovered nickel about 28km from Laverton near Mt Windarra in 1969. The find triggered a massive run on Poseidon shares that sent the stock soaring from 80¢ to a peak of $280 in just over six months. But by the end of 1970 the dream run was over with falling nickel prices sending Poseidon shares plunging to $39. Mt Windarra began production in 1974 but Poseidon failed to make a profit and collapsed two years later. Niagara shares have staged their own run, more than trebling from 24.5¢, when Mr Forrest’s appointment was announced on April 4, to $1.08 on Tuesday. The sharp appreciation of the stock means that Mr Forrest and his associates’ $2.2 million placement at 40¢ a share and a further 117.5 million incentive options, exercisable at 40¢ in five tranches at trigger points between 60¢ and $1, are already in the money. Niagara shareholders are yet to approve Mr Forrest’s appointment and a restructure, which includes a two-forone share consolidation. Mr Daws credits Niagara’s rally to the involvement of Mr Forrest. “The fact that the stock has hit a high of $1.08, I think, is a pretty clear indication that the market thinks that Andrew Forrest and his team taking control of the fortunes of Niagara is a good thing for the company,” Mr Daws said.
TRACEY COOK
http://www.thewest.com.au/default.aspx?MenuID=159&ContentID=27062
26th April 2007, 6:00 WST
Nearly 40 years after one of Australia’s biggest share price runs, the Poseidon name could soon return to the stock exchange trading boards if billionaire entrepreneur Andrew Forrest gets his way. Niagara Mining, which recently appointed Mr Forrest as chairman, is giving serious consideration to a name change to Poseidon, which is synonymous with the nickel boom of the 1970s. Niagara reserved the names Poseidon Nickel Mines and Poseidon Mines more than two years ago. The explorer also has a strong claim on the name through its control of the mothballed Windarra mine, near Laverton, which underpinned the original Poseidon. Niagara chairman Doug Daws said that, despite its decision to reserve the Poseidon name, the group had not considered a name change until Mr Forrest came on board earlier this month. “Andrew has a different vision to us and he has made it clear that it is some thing that he wishes to give consideration to,” Mr Daws said. “I think it is a sensational name, a name that is known around the world and is synonymous with the great nickel boom we had in Australia. Niagara is a good name but Poseidon is potentially a much better name.” Poseidon prospector Ken Shirley discovered nickel about 28km from Laverton near Mt Windarra in 1969. The find triggered a massive run on Poseidon shares that sent the stock soaring from 80¢ to a peak of $280 in just over six months. But by the end of 1970 the dream run was over with falling nickel prices sending Poseidon shares plunging to $39. Mt Windarra began production in 1974 but Poseidon failed to make a profit and collapsed two years later. Niagara shares have staged their own run, more than trebling from 24.5¢, when Mr Forrest’s appointment was announced on April 4, to $1.08 on Tuesday. The sharp appreciation of the stock means that Mr Forrest and his associates’ $2.2 million placement at 40¢ a share and a further 117.5 million incentive options, exercisable at 40¢ in five tranches at trigger points between 60¢ and $1, are already in the money. Niagara shareholders are yet to approve Mr Forrest’s appointment and a restructure, which includes a two-forone share consolidation. Mr Daws credits Niagara’s rally to the involvement of Mr Forrest. “The fact that the stock has hit a high of $1.08, I think, is a pretty clear indication that the market thinks that Andrew Forrest and his team taking control of the fortunes of Niagara is a good thing for the company,” Mr Daws said.
TRACEY COOK
http://www.thewest.com.au/default.aspx?MenuID=159&ContentID=27062
Monday, April 16, 2007
Magnate's new Poseidon adventure
Magnate's new Poseidon adventure
April 14, 2007
The market is betting Andrew Forrest may turn nickel into gold, writes Jamie Freed.
THE legendary Poseidon nickel deposit, which launched the greatest speculative sharemarket boom in Australian history, could soon be resurrected by one of the nation's most controversial entrepreneurs.
Almost 40 years after the nation was captivated by one drill hill in remote Western Australia, investors are again betting there is plenty more nickel - and money - to be mined from the infamous site.
In late 1969 a temporary global nickel shortage combined with a spectacular amount of hype about the Windarra discovery propelled shares in its owner, Poseidon, from less than $1 to a peak of $280.
"It was terribly exciting," recalls Tony Howland-Rose, a veteran miner who helped discover the deposit as a young geophysicist. "It was just sort of the unreality about it all."
Everyone from Sydney taxi drivers to City of London financiers took a punt on once-obscure exploration companies in the wake of the Poseidon find. But dreams were shattered and fortunes lost after the drilling results responsible for the frenzy were revealed as fraudulent.
Eventually, a mine was built on the site, but it proved very disappointing before it closed 18 years ago.
Yet the spotty history of Windarra has not fazed the Perth entrepreneur and paper billionaire Andrew "Twiggy" Forrest, who is leading an attempt to reopen the mine.
"Poseidon always generates an emotion of excitement in the hearts of the more experienced financial players," he said.
Mr Forrest and his family are hardly strangers to the Laverton region where Windarra is located. It was first explored by Mr Forrest's great great uncle, Sir John Forrest, in 1869 during a search for the lost Leichhardt expedition party. Sir John later became the state's first premier.
And now that Andrew Forrest - a friend of the Prime Minister, John Howard, and a guest at the controversial Perth dinner for the Labor leader, Kevin Rudd, hosted by Brian Burke - has put his weight behind Windarra, he has got the market buzzing.
The value of the company that owns the deposit, Niagara Mining, has tripled within a week on the strength of Mr Forrest's involvement alone.
His last nickel venture, Anaconda Mining, left investors in the lurch when the Murrin Murrin plant failed to meet initial expectations. The corporate regulator is seeking to ban him as a company director for misleading investors over his $3.2 billion Pilbara iron ore venture, Fortescue Metals. His name came up frequently at the recent West Australian Corruption and Crime Commission hearings, since he used Mr Burke as a lobbyist.
Yet punters are still backing Mr Forrest in his latest venture.
Mr Howland-Rose admits he had a "good laugh" when he learned Mr Forrest, a friend, had decided to tackle Windarra. But he thinks there is a good chance it could be resurrected.
Based on his experience, Mr Howland-Rose said he was hardly surprised Forrest's involvement managed to triple the value of the deposit.
"Markets are like a pendulum," he said. "Sometimes it swings one way and sometimes it swings the other. And sometimes it seems to swing so far it's ridiculous. And that's what happened with Poseidon."
The Poseidon fraud led to stricter controls on sharemarket reporting standards and insider trading following the Rae commission report in 1974.
Although Windarra was mined from 1974 to 1989, primarily by WMC Resources, it proved a break-even proposition at best. Overall, the rocks contained only one-third the amount of nickel the initial spectacular drill results had indicated. For all his enthusiasm, Mr Forrest may be unable to remedy that.
Ron Grogan, a metallurgist who worked at Windarra from 1980 to 1983, said: "[Mr Forrest] is certainly the entrepreneurial type who can get projects going, but it doesn't mean you can find nickel."
But a new nickel boom based on seemingly insatiable demand from China has caused the price of the metal to rise tenfold since 2001. Nickel is now trading at more than $US1 an ounce, meaning it could technically be classified as a precious metal with gold, silver and platinum.
That has made once-marginal deposits like Windarra worth a second glance.
The West Australian Government estimates there is at least 52,400 tonnes of nickel left at Windarra, which would be worth $US2.6 billion ($3.1 billion) at today's prices.
Most of the nickel is under water at the moment, the 550-metre mine shaft flooded up to the 70-metre mark.
On the surface the site in the shire of Laverton serves as a monument to the Poseidon boom, and is visited by hordes of curious tourists.
But that has already begun to change. Drill rigs are on site and tourists are banned on blasting days. Windarra's owners expect they will be able to start mining in September, on a small scale.
Luckily for Niagara, many industry veterans familiar with Windarra do not think most of the past issues, such as the lower-than-expected amount of nickel and some serious rock falls, will return to haunt the mine.
Dave McGowan, who worked underground at Windarra in the early 1980s, said there had been huge advances since the mine closed 18 years ago.
"There are [mines] currently operating with worse conditions," he said. "Things we were doing in those days are classed as prehistoric nowadays."
Peter Arden, a mining analyst with the company Intersuisse, said the economics of nickel mining were greatly different today to what they were when WMC mined Windarra.
"I think maybe it might finally be the case that [Windarra] does throw up some of the enormous promise that was given to it when it was discovered in the 1960s," he said.
"The nickel price is going to stay high for a lot longer."
The excitement among investors, especially day traders, is palpable at the moment, even if it is not quite at Poseidon-like levels. But a decision on whether to invest in Windarra has turned into a referendum on Mr Forrest and his ability to move beyond his tarnished reputation in the nickel industry, rather than one based on concrete evidence.
"He's an interesting addition to the equation," Mr Arden said. "I sense that he has a strong desire … to put the record straight. He left the operation of [Anaconda's] Murrin Murrin project under less than satisfactory conditions. The technical outcomes were poor and the financial outcomes were drastically bad."
Mr Forrest said Windarra would be a "really simple project" since the type of nickel is much easier to process. "We don't see any of the rocket science required over the road at Murrin Murrin at this project."
The former Niagara chairman Doug Daws, who led the effort to buy the infamous mine from WMC two years ago for $7 million and brought in Mr Forrest to improve its prospects, has stopped short of giving any guarantees about Windarra's future.
However, he did offer this: "One day when the pages of history are written about the mining industry in Western Australia, Andrew Forrest's name will be in bold print."
And depending on the outcome at Windarra, Mr Forrest's name may rank right alongside that of Poseidon.
http://www.smh.com.au/news/business/magnates-new-poseidon-adventure/2007/04/13/1175971360135.html?page=fullpage#
April 14, 2007
The market is betting Andrew Forrest may turn nickel into gold, writes Jamie Freed.
THE legendary Poseidon nickel deposit, which launched the greatest speculative sharemarket boom in Australian history, could soon be resurrected by one of the nation's most controversial entrepreneurs.
Almost 40 years after the nation was captivated by one drill hill in remote Western Australia, investors are again betting there is plenty more nickel - and money - to be mined from the infamous site.
In late 1969 a temporary global nickel shortage combined with a spectacular amount of hype about the Windarra discovery propelled shares in its owner, Poseidon, from less than $1 to a peak of $280.
"It was terribly exciting," recalls Tony Howland-Rose, a veteran miner who helped discover the deposit as a young geophysicist. "It was just sort of the unreality about it all."
Everyone from Sydney taxi drivers to City of London financiers took a punt on once-obscure exploration companies in the wake of the Poseidon find. But dreams were shattered and fortunes lost after the drilling results responsible for the frenzy were revealed as fraudulent.
Eventually, a mine was built on the site, but it proved very disappointing before it closed 18 years ago.
Yet the spotty history of Windarra has not fazed the Perth entrepreneur and paper billionaire Andrew "Twiggy" Forrest, who is leading an attempt to reopen the mine.
"Poseidon always generates an emotion of excitement in the hearts of the more experienced financial players," he said.
Mr Forrest and his family are hardly strangers to the Laverton region where Windarra is located. It was first explored by Mr Forrest's great great uncle, Sir John Forrest, in 1869 during a search for the lost Leichhardt expedition party. Sir John later became the state's first premier.
And now that Andrew Forrest - a friend of the Prime Minister, John Howard, and a guest at the controversial Perth dinner for the Labor leader, Kevin Rudd, hosted by Brian Burke - has put his weight behind Windarra, he has got the market buzzing.
The value of the company that owns the deposit, Niagara Mining, has tripled within a week on the strength of Mr Forrest's involvement alone.
His last nickel venture, Anaconda Mining, left investors in the lurch when the Murrin Murrin plant failed to meet initial expectations. The corporate regulator is seeking to ban him as a company director for misleading investors over his $3.2 billion Pilbara iron ore venture, Fortescue Metals. His name came up frequently at the recent West Australian Corruption and Crime Commission hearings, since he used Mr Burke as a lobbyist.
Yet punters are still backing Mr Forrest in his latest venture.
Mr Howland-Rose admits he had a "good laugh" when he learned Mr Forrest, a friend, had decided to tackle Windarra. But he thinks there is a good chance it could be resurrected.
Based on his experience, Mr Howland-Rose said he was hardly surprised Forrest's involvement managed to triple the value of the deposit.
"Markets are like a pendulum," he said. "Sometimes it swings one way and sometimes it swings the other. And sometimes it seems to swing so far it's ridiculous. And that's what happened with Poseidon."
The Poseidon fraud led to stricter controls on sharemarket reporting standards and insider trading following the Rae commission report in 1974.
Although Windarra was mined from 1974 to 1989, primarily by WMC Resources, it proved a break-even proposition at best. Overall, the rocks contained only one-third the amount of nickel the initial spectacular drill results had indicated. For all his enthusiasm, Mr Forrest may be unable to remedy that.
Ron Grogan, a metallurgist who worked at Windarra from 1980 to 1983, said: "[Mr Forrest] is certainly the entrepreneurial type who can get projects going, but it doesn't mean you can find nickel."
But a new nickel boom based on seemingly insatiable demand from China has caused the price of the metal to rise tenfold since 2001. Nickel is now trading at more than $US1 an ounce, meaning it could technically be classified as a precious metal with gold, silver and platinum.
That has made once-marginal deposits like Windarra worth a second glance.
The West Australian Government estimates there is at least 52,400 tonnes of nickel left at Windarra, which would be worth $US2.6 billion ($3.1 billion) at today's prices.
Most of the nickel is under water at the moment, the 550-metre mine shaft flooded up to the 70-metre mark.
On the surface the site in the shire of Laverton serves as a monument to the Poseidon boom, and is visited by hordes of curious tourists.
But that has already begun to change. Drill rigs are on site and tourists are banned on blasting days. Windarra's owners expect they will be able to start mining in September, on a small scale.
Luckily for Niagara, many industry veterans familiar with Windarra do not think most of the past issues, such as the lower-than-expected amount of nickel and some serious rock falls, will return to haunt the mine.
Dave McGowan, who worked underground at Windarra in the early 1980s, said there had been huge advances since the mine closed 18 years ago.
"There are [mines] currently operating with worse conditions," he said. "Things we were doing in those days are classed as prehistoric nowadays."
Peter Arden, a mining analyst with the company Intersuisse, said the economics of nickel mining were greatly different today to what they were when WMC mined Windarra.
"I think maybe it might finally be the case that [Windarra] does throw up some of the enormous promise that was given to it when it was discovered in the 1960s," he said.
"The nickel price is going to stay high for a lot longer."
The excitement among investors, especially day traders, is palpable at the moment, even if it is not quite at Poseidon-like levels. But a decision on whether to invest in Windarra has turned into a referendum on Mr Forrest and his ability to move beyond his tarnished reputation in the nickel industry, rather than one based on concrete evidence.
"He's an interesting addition to the equation," Mr Arden said. "I sense that he has a strong desire … to put the record straight. He left the operation of [Anaconda's] Murrin Murrin project under less than satisfactory conditions. The technical outcomes were poor and the financial outcomes were drastically bad."
Mr Forrest said Windarra would be a "really simple project" since the type of nickel is much easier to process. "We don't see any of the rocket science required over the road at Murrin Murrin at this project."
The former Niagara chairman Doug Daws, who led the effort to buy the infamous mine from WMC two years ago for $7 million and brought in Mr Forrest to improve its prospects, has stopped short of giving any guarantees about Windarra's future.
However, he did offer this: "One day when the pages of history are written about the mining industry in Western Australia, Andrew Forrest's name will be in bold print."
And depending on the outcome at Windarra, Mr Forrest's name may rank right alongside that of Poseidon.
http://www.smh.com.au/news/business/magnates-new-poseidon-adventure/2007/04/13/1175971360135.html?page=fullpage#
Friday, April 6, 2007
Twiggy back in nickel via old Poseidon mine
Twiggy back in nickel via old Poseidon mine
Jamie FreedApril 5, 2007
YEARS after leaving bondholders in the lurch at Anaconda Nickel, paper billionaire Andrew "Twiggy" Forrest has returned to the nickel business to resurrect the mine responsible for the infamous Poseidon Nickel boom of 1969.
Mr Forrest resigned from a few board seats last year, arguing he was focused on managing Fortescue Metals' $3.2 billion Pilbara iron ore development. But he has since decided to accept the chairmanship - and millions of options - in the owner of the infamous Windarra mine, Perth explorer Niagara Mining.
Niagara, which last traded at 24c, said it would undertake a 2-for-1 share consolidation.
Mr Forrest and some of his associates will join the board and buy $2.2 million worth of 40c shares, which will give them a 4.5 per cent stake in the company.
In return they will receive 117.5 million "incentive" options, which would take their stake up to 35 per cent. These are exercisable at 40c in five tranches when, for five consecutive days, the shares trade at 60c, 70c, 80c, 90c and $1.
Niagara picked up the closed Windarra mine for $7 million from WMC Resources in 2005. The notorious mine had previously been owned by Robert Champion de Crespigny's Normandy Mining and before that was responsible for the Poseidon Nickel bubble and the famous Rae Commission, which led to stricter mining reporting standards.
But its low-grade ore deposit never lived up to the hype that generated the 1970s boom and it has hardly caused a blip in mining circles since.
Mr Forrest said he was attracted to Niagara by "the asset itself and the genuineness of the people".
He said his involvement should allow the company a lot more access to funding, given his history of junk bond raisings for Anaconda and Fortescue.
Although there were severe technical problems during the start-up phase of the Murrin Murrin nickel plant when Mr Forrest was involved with Anaconda - since renamed Minara Resources - he said the Windarra project should not prove difficult to develop.
"Remember, it is a sulphide [deposit], not a laterite, so it is quite simple," Mr Forrest said.
Niagara is initially targeting a resource of 70,000 tonnes of contained nickel from the project.
"There's definitely going to be more resources found at depth," said Richard Monti, a new director who previously headed marketing at Murrin Murrin.
April 5, 2007
YEARS after leaving bondholders in the lurch at Anaconda Nickel, paper billionaire Andrew "Twiggy" Forrest has returned to the nickel business to resurrect the mine responsible for the infamous Poseidon Nickel boom of 1969.
Mr Forrest resigned from a few board seats last year, arguing he was focused on managing Fortescue Metals' $3.2 billion Pilbara iron ore development. But he has since decided to accept the chairmanship - and millions of options - in the owner of the infamous Windarra mine, Perth explorer Niagara Mining.
Niagara, which last traded at 24c, said it would undertake a 2-for-1 share consolidation.
Mr Forrest and some of his associates will join the board and buy $2.2 million worth of 40c shares, which will give them a 4.5 per cent stake in the company.
In return they will receive 117.5 million "incentive" options, which would take their stake up to 35 per cent. These are exercisable at 40c in five tranches when, for five consecutive days, the shares trade at 60c, 70c, 80c, 90c and $1.
Niagara picked up the closed Windarra mine for $7 million from WMC Resources in 2005. The notorious mine had previously been owned by Robert Champion de Crespigny's Normandy Mining and before that was responsible for the Poseidon Nickel bubble and the famous Rae Commission, which led to stricter mining reporting standards.
But its low-grade ore deposit never lived up to the hype that generated the 1970s boom and it has hardly caused a blip in mining circles since.
Mr Forrest said he was attracted to Niagara by "the asset itself and the genuineness of the people".
He said his involvement should allow the company a lot more access to funding, given his history of junk bond raisings for Anaconda and Fortescue.
Although there were severe technical problems during the start-up phase of the Murrin Murrin nickel plant when Mr Forrest was involved with Anaconda - since renamed Minara Resources - he said the Windarra project should not prove difficult to develop.
"Remember, it is a sulphide [deposit], not a laterite, so it is quite simple," Mr Forrest said.
Niagara is initially targeting a resource of 70,000 tonnes of contained nickel from the project.
"There's definitely going to be more resources found at depth," said Richard Monti, a new director who previously headed marketing at Murrin Murrin.
http://www.smh.com.au/news/business/twiggy-back-in-nickel-via-old-poseidon-mine/2007/04/04/1175366327622.html
Jamie FreedApril 5, 2007
YEARS after leaving bondholders in the lurch at Anaconda Nickel, paper billionaire Andrew "Twiggy" Forrest has returned to the nickel business to resurrect the mine responsible for the infamous Poseidon Nickel boom of 1969.
Mr Forrest resigned from a few board seats last year, arguing he was focused on managing Fortescue Metals' $3.2 billion Pilbara iron ore development. But he has since decided to accept the chairmanship - and millions of options - in the owner of the infamous Windarra mine, Perth explorer Niagara Mining.
Niagara, which last traded at 24c, said it would undertake a 2-for-1 share consolidation.
Mr Forrest and some of his associates will join the board and buy $2.2 million worth of 40c shares, which will give them a 4.5 per cent stake in the company.
In return they will receive 117.5 million "incentive" options, which would take their stake up to 35 per cent. These are exercisable at 40c in five tranches when, for five consecutive days, the shares trade at 60c, 70c, 80c, 90c and $1.
Niagara picked up the closed Windarra mine for $7 million from WMC Resources in 2005. The notorious mine had previously been owned by Robert Champion de Crespigny's Normandy Mining and before that was responsible for the Poseidon Nickel bubble and the famous Rae Commission, which led to stricter mining reporting standards.
But its low-grade ore deposit never lived up to the hype that generated the 1970s boom and it has hardly caused a blip in mining circles since.
Mr Forrest said he was attracted to Niagara by "the asset itself and the genuineness of the people".
He said his involvement should allow the company a lot more access to funding, given his history of junk bond raisings for Anaconda and Fortescue.
Although there were severe technical problems during the start-up phase of the Murrin Murrin nickel plant when Mr Forrest was involved with Anaconda - since renamed Minara Resources - he said the Windarra project should not prove difficult to develop.
"Remember, it is a sulphide [deposit], not a laterite, so it is quite simple," Mr Forrest said.
Niagara is initially targeting a resource of 70,000 tonnes of contained nickel from the project.
"There's definitely going to be more resources found at depth," said Richard Monti, a new director who previously headed marketing at Murrin Murrin.
April 5, 2007
YEARS after leaving bondholders in the lurch at Anaconda Nickel, paper billionaire Andrew "Twiggy" Forrest has returned to the nickel business to resurrect the mine responsible for the infamous Poseidon Nickel boom of 1969.
Mr Forrest resigned from a few board seats last year, arguing he was focused on managing Fortescue Metals' $3.2 billion Pilbara iron ore development. But he has since decided to accept the chairmanship - and millions of options - in the owner of the infamous Windarra mine, Perth explorer Niagara Mining.
Niagara, which last traded at 24c, said it would undertake a 2-for-1 share consolidation.
Mr Forrest and some of his associates will join the board and buy $2.2 million worth of 40c shares, which will give them a 4.5 per cent stake in the company.
In return they will receive 117.5 million "incentive" options, which would take their stake up to 35 per cent. These are exercisable at 40c in five tranches when, for five consecutive days, the shares trade at 60c, 70c, 80c, 90c and $1.
Niagara picked up the closed Windarra mine for $7 million from WMC Resources in 2005. The notorious mine had previously been owned by Robert Champion de Crespigny's Normandy Mining and before that was responsible for the Poseidon Nickel bubble and the famous Rae Commission, which led to stricter mining reporting standards.
But its low-grade ore deposit never lived up to the hype that generated the 1970s boom and it has hardly caused a blip in mining circles since.
Mr Forrest said he was attracted to Niagara by "the asset itself and the genuineness of the people".
He said his involvement should allow the company a lot more access to funding, given his history of junk bond raisings for Anaconda and Fortescue.
Although there were severe technical problems during the start-up phase of the Murrin Murrin nickel plant when Mr Forrest was involved with Anaconda - since renamed Minara Resources - he said the Windarra project should not prove difficult to develop.
"Remember, it is a sulphide [deposit], not a laterite, so it is quite simple," Mr Forrest said.
Niagara is initially targeting a resource of 70,000 tonnes of contained nickel from the project.
"There's definitely going to be more resources found at depth," said Richard Monti, a new director who previously headed marketing at Murrin Murrin.
http://www.smh.com.au/news/business/twiggy-back-in-nickel-via-old-poseidon-mine/2007/04/04/1175366327622.html
Nickel pulls Twiggy back
Nickel pulls Twiggy back
Kevin Andrusiak
April 05, 2007
ANDREW "Twiggy" Forrest will make a belated return to the nickel mining game, tying in with the mine that was at the centre of the Poseidon nickel boom and bust of the early 1970s.
Mr Forrest, the billionaire founder of iron ore hopeful Fortescue Metals, will assume the post of non-executive chairman of Perth-based junior Niagara Mining, the company with dreams of remining the West Australian goldfields' Mt Windarra deposit, discovered by Poseidon in the late 1960s.
Mr Forrest will take a 4.5 per cent stake in the company by buying $2.2 million Niagara shares, pending shareholder approval, in a deal that includes a swag of options and which could see him end up with a 35 per cent stake in the company.
Mr Forrest's previous foray into nickel was a bitter disappointment after he failed to prove up a 100,000 tonne per annum dream during his time at Anaconda Nickel.
That saw many investors lose millions and Mr Forrest retreat from corporate life until he returned to lead Fortescue Metals, which is on the verge of breaking the iron ore duopoly in the Pilbara held by Rio Tinto and BHP Billiton.
"I've had an eye on this industry for a very long time," he said. "As our clients at Fortescue are satisfied in their iron ore needs, the next question they always ask is, can you help me secure a source of nickel?" Nickel hit a record high of $49,800 a tonne yesterday as world stockpiles fell further.
Niagara bought Mt Windarra from WMC Resources in 2005 just before it was taken over by BHP Billiton. Mt Windarra produced 7 million tonnes of nickel sulphide before it closed in 1991.
It was the centre of the Poseidon nickel bubble in the 1970s which saw shares in the junior explorer blow out to $280 before it eventually collapsed. Poseidon delisted in 1976 in a move that tainted the Australian mining industry at the time. Mt Windarra was bought by Western Mining, which became WMC.
Niagara does not have a JORC-compliant resource for Mt Windarra.
Chief executive Chris Daws, a former stockbroker who was previously banned from the financial services industry for deceiving clients, before the ban was lifted in March last year, said Niagara had an initial target of 70,000 tonnes of nickel for Mt Windarra.
Niagara shares are worth 24.5c.
http://www.theaustralian.news.com.au/common/story_page/0,5744,21508092%255E643,00.html
Kevin Andrusiak
April 05, 2007
ANDREW "Twiggy" Forrest will make a belated return to the nickel mining game, tying in with the mine that was at the centre of the Poseidon nickel boom and bust of the early 1970s.
Mr Forrest, the billionaire founder of iron ore hopeful Fortescue Metals, will assume the post of non-executive chairman of Perth-based junior Niagara Mining, the company with dreams of remining the West Australian goldfields' Mt Windarra deposit, discovered by Poseidon in the late 1960s.
Mr Forrest will take a 4.5 per cent stake in the company by buying $2.2 million Niagara shares, pending shareholder approval, in a deal that includes a swag of options and which could see him end up with a 35 per cent stake in the company.
Mr Forrest's previous foray into nickel was a bitter disappointment after he failed to prove up a 100,000 tonne per annum dream during his time at Anaconda Nickel.
That saw many investors lose millions and Mr Forrest retreat from corporate life until he returned to lead Fortescue Metals, which is on the verge of breaking the iron ore duopoly in the Pilbara held by Rio Tinto and BHP Billiton.
"I've had an eye on this industry for a very long time," he said. "As our clients at Fortescue are satisfied in their iron ore needs, the next question they always ask is, can you help me secure a source of nickel?" Nickel hit a record high of $49,800 a tonne yesterday as world stockpiles fell further.
Niagara bought Mt Windarra from WMC Resources in 2005 just before it was taken over by BHP Billiton. Mt Windarra produced 7 million tonnes of nickel sulphide before it closed in 1991.
It was the centre of the Poseidon nickel bubble in the 1970s which saw shares in the junior explorer blow out to $280 before it eventually collapsed. Poseidon delisted in 1976 in a move that tainted the Australian mining industry at the time. Mt Windarra was bought by Western Mining, which became WMC.
Niagara does not have a JORC-compliant resource for Mt Windarra.
Chief executive Chris Daws, a former stockbroker who was previously banned from the financial services industry for deceiving clients, before the ban was lifted in March last year, said Niagara had an initial target of 70,000 tonnes of nickel for Mt Windarra.
Niagara shares are worth 24.5c.
http://www.theaustralian.news.com.au/common/story_page/0,5744,21508092%255E643,00.html
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