no news is... frustrating, page-11

This article in today's Age newspaper.

Territory debt deal in Monarch's sight
Date: July 03 2008


Jamie Freed


PERTH mining identity Michael Kiernan's entangled resources empire is being unravelled piece by piece.

The newly appointed chairman of Territory Resources, Andrew Simpson, yesterday said the iron ore miner was hopeful of striking a debt retrieval agreement with Mr Kiernan's ailing goldminer, Monarch Gold, within the next two days to help it stave off administration.

In the March quarter, Territory loaned Monarch $19 million to keep it afloat. Mr Simpson said he could not recall whether it had since made more cash advances to the goldminer.

Mr Kiernan last week told Territory, which owns 19.9% of Monarch, that the goldminer would be forced into administration if it did not receive at least $3 million more in loans.

Mr Simpson said the revised proposal from Mr Kiernan, presented to the Territory board on Tuesday evening, was a "significant improvement".

It is believed Mr Kiernan has offered to put up $15 million of his own money to help repay the debt.

Mr Kiernan, the managing director of Monarch, last week resigned his positions as chairman of Territory and deputy chairman of India Resources.

In December, India Resources loaned $7 million to Monarch to prop up the goldminer's dire financial position.

In February, Mr Kiernan said the funds were expected to be repaid in full by April, but it is understood that some of the loan remains outstanding.

Territory recently appointed Ferrier Hodgson as a receiver to ensure it retrieves funds from a secured loan over Monarch's Minjar gold project. Monarch agreed in April to sell Minjar to unlisted explorer Aard Metals for $11 million, including $5 million of cash payments to be made by June 30.

Monarch has not yet revealed whether it received the $5 million by that deadline, and an Aard representative yesterday said it was "not able to comment on the deal at this time".

Mr Kiernan yesterday declined to speak to BusinessDay.

Territory's shares have taken a beating in recent months despite huge iron ore price gains, due to concerns over its growing entanglement with Monarch and other companies linked to Mr Kiernan.

Mr Simpson said Territory's focus would return to its core iron ore operations in the Northern Territory.