Hegarty's Tigers in battle to buy OZ's gold by Jamie Freed March 11, 2009
OZ MINERALS is talking to more than one potential buyer of its Martabe gold project in Indonesia because of the inability of a leading candidate, the Owen Hegarty-backed Tigers Gold, to obtain enough funding for the $210 million purchase.
Tigers was established on December 5 by Oxiana's former company secretary David Forsyth. The previous day OZ, the merged Oxiana-Zinifex, disclosed the full extent of its refinancing difficulties and began accepting expressions of interest in its assets.
Mr Hegarty, the former head of Oxiana, resigned from the OZ board two weeks later. He joined the board of Tigers, a private company, last month.
OZ was unable to clarify whether Tigers was already in negotiations to buy Martabe when Mr Hegarty left, citing confidentiality agreements with potential buyers of assets.
OZ's chief executive, Andrew Michelmore, recently told the market he expected the sale of Martabe would be completed by the end of last week. But the Herald has now been told a sale is not "absolutely imminent".
OZ has yet to announce the sale of Martabe or its Golden Grove mine. It has until March 30 to convince its banking syndicate to give it a final extension that would allow China Minmetals to proceed with its $2.6 billion bid for the company. The deal remains subject to Foreign Investment Review Board approval.
The Herald understands OZ had some aspects of exclusivity in its negotiations with Tigers, but it is now more open to considering alternative offers since Tigers's funding has so far failed to materialise. Multiple buyers remain interested in Martabe and Golden Grove.
Tigers is believed to be seeking funding from institutional investors, but despite the attraction of gold, it is difficult to obtain funding in this market. In addition to the purchase price, it will cost an extra $345 million to complete the construction of Martabe.
Although many goldminers, including Newcrest Mining, Lihir Gold and Barrick Gold, have strong balance sheets, the nature of the resource and the operating situation in Indonesia are believed to have deterred some potential buyers.
Tigers, which appears to have been gearing up for a public listing, cites its registered office as the accounting firm of Barassi & Co in Melbourne. Mr Hegarty has had previous business relationships with the firm's head, Ken Barassi, and his cousin, the football legend Ron Barassi.
Another company linked to Mr Forsyth registered the domain name www.tigersgold.com in January.
Mr Forsyth, who now works at Citadel Resource Group alongside Mr Hegarty and the former Oxiana chief financial officer Jeff Sells, said he was unable to comment about Tigers interest in Martabe. A potential listing of Tigers was dependent on "a number of factors", he said.
OZ shares closed 5c higher at 62.5c yesterday, well below the 82.5c on offer from Minmetals.
OZL Price at posting:
$6.25 Sentiment: None Disclosure: Held
