Who knows what will happen with MK. Looks like he has already...

Who knows what will happen with MK. Looks like he has already outsmarted the dills running TTY.
The drips running TTY wouldn't know the time of day.

It's easy to be critical, but it takes brains to know what to do. MK might just have the last laugh.


Michael Kiernan Is Still Busily Attempting To Reassemble His Once Proud Business Empire


By Our Man in Oz



Reclaiming a lost empire is not something easily done, as the Romans discovered a few thousand years ago and the British more recently. History, however, does not weigh heavily on the mind of irascible Australian mining entrepreneur, Michael Kiernan, who is busily re-assembling several parts of his business empire that he mislaid over three tumultuous, and unhappy, years. “It’s still a work in progress”, is how Kiernan described his efforts to date, which include the creation of a master holding company called Stirling Resources, and a series of satellite companies, some new and some from his previous corporate life. The ultimate aim is to have all the parts in place for a re-run of the commodities boom, with Kiernan very much a paid-up member of the stronger-for-longer resources club.
“A few tough years do not damage underlying demand for commodities of every description in the fast-growing Asian region”, Kiernan told Minesite in his modest office in the inner Perth suburb of Subiaco. “There’s no doubt in my mind that we’re going to see strong growth in this region for decades to come and that means increased use of basic raw materials such as copper, iron ore, titanium minerals, and coal.” It’s those minerals and metals, along with gold, which can be found in the re-emerging Kiernan empire which includes a 40 per cent stake in the collapsed (but recovering) Monarch Gold, a 20 per cent in the copper explorer, Redbank Mines, an 82 per cent stake in the titanium explorer, Olympia Resources, and a 12.6 per cent stake in the tungsten explorer, Peel Exploration.

At first glance the list looks impressive, though as you dig deeper it becomes obvious that more flesh needs to be put on the corporate skeleton, with cash generation notably absent from the operating assets. “I’m not really ready yet to market the new structure to the investment markets”, Kiernan said. “Apart from the fact that most institutional investors have a 12 minute view of the world when we have a 12 month view, there is a need to complete some of the deals, and bed down operations, and add a few more bits to the structure.” One of those future bits is likely to be a coal asset, developed in joint venture with the Indian resource company, NMDC, in the most unlikely of places, New Zealand. “You would be surprised how much coal there is in New Zealand”, Kiernan said. “And there’s a new government over there that wants to encourage the development of the country’s mining industry.”

NDMC is not the only international company teaming up with Kiernan, a man with a management style akin to a human bulldozer and a reputation for getting things done even if it means banging a few heads together on the way to the target. Joining it is the Austrian commodities trader, DCM DECOmetal, a company which backed Kiernan heavily when he first made his name in resources as the man who saved the manganese miner, Consolidated Minerals. Of course, Kiernan watches will know that he then proceeded to lose control in a bitter boardroom punch-up that was followed by a high-priced takeover battle which saw the Ukrainian oligarch, Gennadiy Bogolyubov, make the top bid of A$1.2 billion for a company which would probably be trading at less than half that today.

While Bogolyubov was busy acquiring ConsMin, Kiernan was equally busy with his first attempt at a rebound, via the acquisition of stakes in Monarch, Territory Iron and Windimurra Vanadium. The timing with that initial attempted return was awful, catching the first downward waves of the commodity-price correction which cascaded into last year’s slump. This time, Kiernan argues, it will be different. “I am slowly putting the farm back together, but it will have a different structure this time,” he said. “Stirling will sit at the centre with my family interests and those of DECOmetal holding around 20 per cent each. The aim is to then have this series of satellite investments with the structure designed to prevent a repeat of what happened at ConsMin. This time I will have much tighter control.”

Listening to Kiernan, it’s not hard to be impressed by his enthusiasm. But, it is equally easy to see that he has a long way to go. Still, talking with authority, Kiernan points to the corporate “tree” he is growing, topped by Stirling, which gets its name from the first governor of the Swan River colony which grew to become Western Australia. Under Stirling Operations comes Stirling Copper, with a step down to Redbank as the operating asset, then across to Stirling Iron ore (no step down, yet), Stirling Zircon, focusing on mineral sands, Stirling Coal (void, so far), and Stirling Gold, with Monarch underneath.

It looks impressive and Kiernan earns points for optimism, not that Australian investors are yet to sign up as believers in this return of a sometimes larger-than-life character. On the stock market, Stirling has technically risen strongly in price over the past few months after accounting for a 1-for-10 capital reduction. The share price low point was A1.4 cents (translated now as A14 cents, versus the latest trades at A24 cents). But, in dollar terms, that latest prices means Stirling is only capitalised at A$14 million. For cautious investors this low value is a warning that Kiernan currently has an equal number of believers and non-believers. The trick in watching his return, and possibly profiting from it, is to see how he adds management capacity, and producing assets to the mix, while remembering all the time that the Indians and Austrians backing this particular attempt to re-write history are not foolish people. They believe Kiernan can do it. And at some stage the man himself may find time for a visit to London to explain how the plan is working.