Forrest racks up profit as Niagara eyes switch
2nd June 2007, 12:00 WST
Niagara Mining is pushing ahead with a plan to re-brand itself with the historic name Poseidon Nickel as part of moves that have produced more than $100 million in paper profits for billionaire Andrew Forrest and small fortunes for other diehard supporters.
Subiaco-based Niagara will next month seek shareholder approval for the name change and the appointment of Mr Forrest to its board.
Shareholders will also be asked to back the issue of 115 million options with a conversion price of 40¢ to Mr Forrest.
With Niagara shares having risen more than five-fold since Mr Forrest’s plans to join the company were unveiled last month and the stock closing at $1.37 yesterday, the Fortescue Metals boss is already $112 million in the black on the stock.
The proposed name change to Poseidon, backed by Mr Forrest, harks back to the nickel boom in the early 1970s when the Mt Windarra nickel project and its then owner Poseidon were the market’s hottest news.
Niagara bought the dormant Mt Windarra project four years ago and its chief executive, former stockbroker Chris Daws, began working to revive the project and explore surrounding tenements.
Mr Daws is the son of the company’s chairman Doug Daws and the grandson of legendary former Boulder Shire president Charles Daws.
Niagara gained the support of Windarra enthusiasts including former Eyres Reed stockbroker Jeff Verheggen and Stirling Lions Soccer Club chairman Don Evans.
Stirling Lions is closely affiliated with the northern suburbs Macedonian community, members of which have invested heavily in Niagara.
Market sources said Mr Verheggen’s family connections had made around $30 million from backing Mr Daws’ vision for a mining revival at Mt Windarra. Friends and business associates of Mr Evans and Mr Verheggen have enjoyed big profits.
Papers for the July 2 shareholder meeting reveal that West Perth corporate advisory group RM Capital is also about to be richly rewarded for its long-standing support.
Niagara is seeking approval for RM, which is headed by corporate adviser James Richardson and former stockbroker Guy Le Page, to be issued six million Niagara options at a strike price of 40¢.
Mr Daws said the options deal with RM was struck early this year before the Forrest-inspired run in Niagara shares and recognised significant amounts of unpaid work performed by the group.
Mr Forrest’s support and cash flow into the group had allowed it to recruit former senior Jubilee Mines geologist Neil Hutchison to oversee the group’s exploration activities.
Mr Daws said it was time to step down and for Mr Forrest to install a new management group.
“I am handing over to Andrew and his team, whoever that might be,” he said. The notice of meeting shows experts from BDO have found the proposed options issue to Mr Forrest to be fair and reasonable despite the potential dilution that could see the billionaire own 41 per cent of Niagara in return for $47 million cash.
“Mr Forrest possesses a wealth of knowledge and experience in resources in Australia,” BDO said.
“In addition, Mr Forrest can bring a number of contacts and relationships that may assist Niagara in achieving its objectives.”
NEALE PRIOR
I HOLD and what a great week it has been
AAR,AEX,AUT,EXT,NIA,VRE,WES..........
NIA
niagara mining limited
