Tide recedes in river of gold for Calvert-Jones Author: IAN McILWRAITH Date: 17/05/2012 Words: 1018 Source: AGE Publication: The Age Section: Business Page: 9
POOR John Calvert-Jones, brother-in-law to Rupert Murdoch, has turned $7 million into $120,000 from a seven-year attachment to soon-to-be-rebirthed Range River Gold. Calvert-Jones, who made his name as a stockbroker, has been a loyal supporter of Range River and its Mt Morgans gold projects since buying his first shares in 2005, but was unfortunately holding more than 11 per cent of the company when the music stopped a year ago.
He and his family investment company, Seafirst Australia, were also owed $1 million from convertible notes, which do not seem to have converted when due in March last year, given that he is listed as an unsecured creditor for that amount.
Not only was Calvert-Jones represented by a proxy at the early creditors meetings for Range River, at one of them the chief executive of Seafirst, Angela Rutherford, also popped in as an observer to see what was happening.
The good news for Calvert-Jones and other shareholders in Range River is that after more than 12 months of suspension, and a fair bit of disembowelling, they get to vote next month on giving the corporate shell a second chance at life and an ASX listing, thanks to Garrison Capital.
The bad news is that existing investors will own just a fraction of Range River after a 1-for-60 share consolidation and two subsequent share issues to get the company out of penury. Still, that is a teeny hold on something, rather than a big piece of zero.
The Garrison plan is to place 140 million shares at 0.5? each, raising $700,000, to provide some working capital, and then raise another $3 million at 2? a share via a prospectus.
Unfortunately, just over $2 million of that cash has to go to pay off Range River creditors and about the only one smiling there is likely to be Macquarie Bank, which looks like getting all of its money back.
It made a $4.5 million gold loan to Range River at the beginning of 2011, and was claiming $5.6 million in the administration. Insider hears it is still owed $1 million, and will get first dibs on the raising, underwritten by Garrison.
The explorer's appointed voluntary administrators from PPB Advisory, headed by Stephen Longley, have told unsecured creditors, though, to expect somewhere between 3? and 6? in the dollar on their claims. For Calvert-Jones' $1 million, for example, that would be a comparatively paltry return of $50,000.
His existing 212.95 million shares will be reduced to about 3.5 million, which at the prospectus price of 2? each are worth $70,000.
Garrison's Brian McMaster tells Insider that the plan is to retain some likely gold tenements in South Australia's Gawler Craton, which he thinks hold promise. Located about 100 kilometres west of the Stuart Highway (and three times that distance from the giant Olympic Dam), it is an area known for gold plays.
RNG Price at posting:
48.0¢ Sentiment: None Disclosure: Held
