ann out director disclosure breach, page-12

The purchase price was the same as The Speculator, he's not only good looking but he has smarts as well. He can can put his shoes under my bed anytime.
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The Speculator: going for the throat of a stock under pressure

By David Haselhurst, ninemsn Money
May 28, 2008,

Shares in West Australian gold/uranium prospector Fairstar Resources (FAS.AX , 0.155, +0, +0%) sold as high as 93c last year and the company's directors were brim full of confidence.

So much so that they launched an all paper bid for a larger company, Golden West Resources (GWR.AX , 1.850, -0.050, -2.630%), which is proving up a sizable iron ore discovery near Wiluna in the mid-west of WA.

Fairstar's offer of five of its shares for every one GWR share saw it win acceptances of 33 percent of GWR's 110 million shares by February of this year. Then things started to go awry with the emerging collapse of the margin lending broker Opes Prime.

Fairstar had borrowed money from Opes and as security it lodged some 10 million GWR shares with the lender. Like so many other corporates and individuals who were lulled into dealing with Opes, when the broker collapsed the parcel of GWR shares was seized by Opes' prime lender, the ANZ Bank, and sold into the market.

The iron ore miner, Portman Ltd, an affiliate of Cleveland Cliffs of the US, snatched up the parcel of 10 million shares. It then topped up from other distressed ex-Opes clients to take its GWR holding to 16 million shares or 14.9 percent.

To protect its bid, Fairstar lifted its offer from 5 shares for one GWR to 7-for-1 and earlier this month extended the bid to June 11. The offer has been declared unconditional. At last count it now holds 26 million GWR shares or just under 24 percent. But Fairstar's own share price remains under pressure because Opes-ANZ is still selling into the market from its seized holdings of Fairstar stock taken from individual shareholders not related to Fairstar management.

The question now exercising the minds of insiders is will Portman, or even a Chinese steel mill, move to take over GWR? That company is certainly in play.

GWR has announced an inferred resource of 86.3 million tones of hematite ore with an average grade of 60.1 percent iron. It is undertaking an extensive drilling program on its areas near Wiluna which is confidently expected to lift the resource to more than 100 million tonnes.

Fairstar shareholders may have the last laugh, however. After the initial bid for Golden West Resources was announced, PricewaterhouseCoopers valued each GWR share at $3 for the purposes of the target statement. If a bid does eventually emerge at $3, Fairstar would receive $78 million for its 26 million GWR shares, worth nearly 23c for each of Fairstar's 340 million shares. That would be a heady premium over Fairstar's recent sales around 12.5c/13xc.

Golden West shares sold last week between $1.60 and $1.80. At a mid-price of $1.70, each Fairstar share has 13c of GWS stock.

On its own account, Fairstar has three prime exploration programs:
• Gold prospects at Kurnalpi, Jones Find and Randalls, situated north and south of the Trans Australia Railway 60-80km east of Kalgoorlie, with a field program scheduled in the current quarter of 5000m of RC and 300m of diamond drilling.
• The early stage Mt Padbury uranium project near Meekatharra, WA, where a radiometric survey is scheduled to define drill targets, and
• A farm-in agreement with Knight Industries Pty Ltd on an oil and gas exploration permit (PEP165) on the Murray basin in north-west Victoria awaiting Victorian Government approval.

We took a punt on 20,000 Fairstar shares at 12.5c at the end of last week.