CRITERION: Tim Boreham From: The Australian May 18, 2010...

CRITERION: Tim Boreham From: The Australian May 18, 2010

Aphrodite Gold (yet to be listed) (AHV)

STILL on the class-struggle theme, Aphrodite exec director Wayne Ryder notes the "super profits" concept derives not from the Ken Henry tax review but from Karl Marx's Das Kapital.

Given the likely dire effects on the West Australian industry, the coming float of this Kalgoorlie gold hopeful should be treated as a collectors' item. Ryder knows of three other prospectuses that have already been pulled, but in line with the JORC-compliant miners' code of silence he's not telling tales.

The (red) perils of the tax aside, Aphrodite is seeking to raise $8m to $10m to further plans for its Kalgoorlie-based gold prospect, conveniently close to the Goldfields Highway and other capitalist mod cons such as electricity and a nearby town replete with oppressed but willing workers.

Aphrodite bought the prospect from Apex Minerals, which was under pressure from its bankers to shed assets, for $7.2m in cash and equity. Aphrodite has already raised $6.5m in seed capital, the extra funds committed to proving up the 983,000oz resource to feasibility-study stage.

The Aphrodite project has suffered from the pass-the-parcel syndrome, having been previously owned by Barrick, from which Apex bought the prospect in 2007, with many of its holders, including legendary prospector Mark Creasy, keen on ongoing exposure. Aphrodite's grades are nothing special, but current gold prices imply decent earnings from a simple open-cut project based on pay-as-you-go treatment at someone else's plant.

For Kalgoorlie old timers, the impost is a far cry from the pre-1980s, when goldminers were exempt from company tax. Oddly enough, we don't recall Hay Street blockaded protesting about differential tax treatment.

Still, there's a silver lining in the tax cloud: drillers are happy to see a new customers.

"Drillers are saying thank god you are staying in the business," Ryder says.

Aphrodite looks well supported ahead of the envisaged June 25 listing, but we'd be happy to sit back and see what happens after.

[email protected] Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not hold shares in the stocks mentioned.

http://www.theaustralian.com.au/business/opinion/