mike the snake kiernan, page-20

Finance pressures unpick Kiernan's threads
Email Print Normal font Large font AdvertisementJamie Freed
July 3, 2008

THE entangled resources empire of the Perth mining identity Michael Kiernan is being unravelled piece by piece.

The newly appointed chairman of Territory Resources, Andrew Simpson, said yesterday that the iron ore miner was hopeful of striking a debt retrieval agreement with Mr Kiernan's ailing goldminer, Monarch Gold, in the next day or two to help it stave off administration. In the March quarter Territory lent Monarch $19 million to keep it afloat. Mr Simpson said he could not recall whether it had since made more cash advances to the goldminer.

Last week Mr Kiernan told Territory, which owns 19.9 per cent of Monarch, that the goldminer would be forced into administration if it did not receive at least $3 million in additional loans.

Mr Simpson said the revised proposal from Mr Kiernan, presented to the Territory board at a previously scheduled meeting on Tuesday evening, was a "significant improvement". It is believed Mr Kiernan has offered to put up $15 million of his personal funds to help repay the debt.

Mr Kiernan, the managing director of Monarch, resigned from his positions as chairman of Territory and deputy chairman of India Resources last week.

In December India lent $7 million to Monarch to prop up the goldminer's dire financial position. In February Mr Kiernan said the funds were expected to be repaid in full by April, but it is understood some of the loan remains outstanding.

Territory recently appointed Ferrier Hodgson as a receiver to ensure it retrieved funds from a secured loan over Monarch's Minjar gold project. In April Monarch agreed to sell Minjar to the unlisted explorer Aard Metals for $11 million, including $5 million of cash payments by June 30.

Monarch has not revealed whether it received the $5 million by the deadline, and an Aard representative said yesterday that it was "not able to comment on the deal at this time".

Mr Kiernan refused to speak to the Herald yesterday because of its previous stories that brought to light the inter-company loans buried in quarterly cash-flow statements.

Territory's shares have taken a beating in recent months despite huge iron ore price gains, because of concerns over its growing entanglement with Monarch and other companies linked to Mr Kiernan.

Mr Simpson said Territory's focus would now return to its core iron ore operations in the Northern Territory.

Monarch remains suspended from trading as it attempts to restructure the terms of an agreement to purchase Harmony Gold's Mt Magnet project after failing to come up with the cash by the previous deadline.