Ferret's Stock to Watch: HEEMSKIRK CONSOLIDATED LTD09:12,...

Ferret's Stock to Watch: HEEMSKIRK CONSOLIDATED LTD
09:12, Wednesday, 29 November 2006

A COMPANY AIMING TO BECOME A GLOBAL MINING HOUSE

Sydney - Wednesday - November 29: (RWE Aust Business News)
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OVERVIEW
********

In the late half century there have been a number of mining
houses the most famous of which emerged out of Collins Street in
Melbourne.

They thrived in mining booms and many became highly successful,
producing solid returns to shareholders, but it takes time to establish
them and investors have to be patient.

Heemskirk Consolidated Ltd (ASX:HSK) has only been going since
2004 but seems to have its timing perfect as resources prices and
projects have taken off in a roll of prosperity not seen since the
1969-70s.

Heemskirk bills itself as a global mining house with the primary
objectives of generating cash flow, profits, sustained dividend flow and
capital growth by direct participation in, and investment within, the
resource industry.

Whilst the company's principal activities will consist of
investing in securities, Heemskirk also intends to adopt all the other
trappings of a mining house.

But to diverge briefly, Monday saw the company report a solid
result to the ASX, attracting market attention.

Heemskirk announced a net profit of $2.18 million in the 12
months to September 30, up from $278,846 for the previous year.

Revenues were $24.51 million, up from $5.35 million.

Basic earnings per share were 3.94c, up from 0.56c.

The company has declared a fully franked dividend of 1c a share,
for shareholders registered on February 1, 2007.

Directors explained the results for the latest year incorporated
a full year of mining house operations.

The revenue earned by the company comprised revenue from its
mining operations and profit on sales of equity investments.

Net tangible asset backing per share was reduced to 13.9c from
42.9c as a result of the continuing transition of Heemskirk from an
investment company to a mining producer, especially with the acquisition
of mining operations and interests.

It also reflected the impact of new reporting standards requiring
classification of mine developments as intangible assets.

As an ASX listed company, Heemskirk will allow an investor to
gain exposure to a diverse range of resource ventures, commodities and
countries.

The mining house structure gives Heemskirk the flexibility to:

* Participate directly in projects, operations and mining regions
to generate cash flow;

* As a conventional mining company take direct equity stakes in
listed and unlisted companies for both capital growth and strategic
purposes;

* As a resource investor create flexible financing structures in
order to participate in a wide range of resource opportunities such as
production, revenue sharing and potential royalties;

* As a resource financier and explore potential opportunities
both directly and indirectly around the world; and

* As an explorer.

Heemskirk shareholders will benefit from a board and management
team well experienced in successful global and domestic resource
companies.

A good example is the non-executive chairman Bruce Kay who was a
top management man with Newmont Mining Corporation before he retired.

At one stage he managed Normandy Mining Ltd's global exploration
program for 13 years as well as holding a top position in Western Mining
Corporation.

Other members on the board are just as experienced including
managing director Kevin Robinson, executive director - corporate and
markets Peter Bird, and non-executive director William Hansen.

SHARE PRICE MOVEMENTS
*********************

Shares of Heemskirk Consolidated yesterday rose 5c to a record
75c. Low for the year is 39c. Dividend is 1c, EPS is 3.09c with a p/e
ratio of 23.03. The company has 56.7 million shares on issue with a
market cap of $39.7 million.

The mining house business structure is not new. Historically,
there have been a number of successful resource companies that have
prospered by adopting a similar approach.

Strengthening global growth underpinned by China and other
emerging economies has resulted in strong demand for commodities and
created numerous opportunities in the resource industry. Heemskirk will
be well placed to benefit from these opportunities.

BACKGROUND
**********

Heemskirk Consolidated was listed on the Australian Stock
Exchange on October 28, 2004.

It is a reasonably small business unit in terms of its asset
base.

Heemskirk will take seed capital positions in appropriate
resource ventures from time to time.

It may, for example, provide Heemskirk with an early exposure to
key mineral provinces, to strong management, or to a new country or
commodity.

The company has significant flexibility to participate in a range
of resource investments including potentially strategic investments.

Heemskirk is gaining early corporate exposure through capital
raisings or directly through on-market undervalued resource
opportunities.

These situations may develop over time into strategic
investments.

The company says it is important to maintain a high level of
liquidity in this business unit to enable Heemskirk to maximise its
investment potential.

Through this business unit, Heemskirk will be in regular contact
with resource and finance industry participants.

This unit will act as a conduit for increased corporate
opportunities whilst gaining valuable recognition for Heemskirk in the
global marketplace.

Heemskirk is working with resource companies to provide flexible
structures that will assist them to obtain a more suitable finance
package for their development, expansion or working capital requirements.

The company does not intend to replace bank finance, but rather
to work alongside the banks, if applicable, to assist companies to obtain
the appropriate debt-to-equity mix for their financing.

This not only benefits the company's financiers, but also
provides more options to the emerging mining company.

Hence, these same mining companies gain an alternative to
dilution of their shareholders' interests through equity raisings, at
times when their share price may be artificially low.

Strategic assets are positions taken either directly or
indirectly in projects or companies that deliver cash flow on a sustained
basis.

Heemskirk anticipates taking a longer-term view with respect to
these investments, which will likely build to the most substantial part
of the company's assets over time.

The size of this business unit may however vary from time to
time, depending on the stage in the resource cycle and the opportunities
available or realised.

This will become the key Heemskirk business unit, and will be
significant to the company's future cash flow and capital growth.

ENDS

Copyright © 2006 RWE Australian Business News. All rights reserved.