money machine

From yesterday's SMH Business Section:
Jamie Freed
June 4, 2007

THESE days a uranium explorer doesn't need any actual uranium in the ground for its float to be nearly four times oversubscribed.

Take Fission Energy. The Tasman Resources spin-off had to turn down money when punters were willing to give it $11.5 million more than it was asking for in its $4 million offering.

"We certainly are very popular," Fission executive chairman Greg Solomon said.

Fission's tenements have received little, if any drilling in the past. And Mr Solomon admitted Fission's parent company hadn't yet found anything "mineable" since listing in 2001. But he said Tasman had done some joint venture deals and successfully spun off Fission and another company, coal-seam methane and hydrogen technology hopeful Eden Energy.

It turns out Fission, Tasman and Eden have a lot in common. They share the same head office in Perth, the same executive chairman, the same legal counsel and some of the same non-executive directors .

It has proven a solid money-spinner for Mr Solomon, a partner in Perth law firm Solomon Brothers who serves as executive chairman of all three companies.

Mr Solomon last year received $242,726 in cash, salary, commissions and superannuation from Eden and another $117,175 from Tasman. Combined with his initial annual salary of $180,000 plus superannuation listed in the Fission prospectus, he could receive more than $540,000 this year.

Mr Solomon's brother, Doug, is a partner in the law firm and also receives fees for serving as a non-executive director of all three companies. Solomon Brothers received $50,000 for preparing the Fission prospectus and it has received legal fees from Tasman and Eden. Additionally, Princebrook, a company in which both brothers have an interest, last year received $275,811 in management and administration fees from Tasman and Eden. And the brothers have millions of shares and options in Tasman and Eden.

Mr Solomon told the Herald his compensation seemed fair given he worked more than 90 hours a week and spent nine months of the year travelling for his roles at Eden and Tasman.

He added he could handle the additional workload at Fission because he was hiring more support staff.

"I'm an executive chairman," Mr Solomon said. "I'm not doing all of the hands-on work."

In a report last month Far East Capital analyst Warwick Grigor noted Tasman had a portfolio of uranium exploration projects in South Australia, but "none of them have shown anything other than a generally prospective environment".

"Tasman is one of a large field of grassroots explorers with a market capitalisation that is greater than it would be without the inclusion of uranium and the prospective [Fission] spin-off," he said.