re: mining news article
More movement to MRS, they already moved a big chunk of CRS to MRS for a song.
www.minesite.com
Minews Story Date: November 10, 2005 Kiernan and Manners Play Ring-A- Roses With Croesus And Monarch In Perth.
By Our Man In Oz
The champagne corks should be popping at Australia’s deeply-troubled Croesus Mining which has just off-loaded a second-hand goldmine, and snatched itself a big name chairman in the imposing shape of Michael Kiernan. The fact that no pops were heard after the Croesus annual meeting earlier today in Kalgoorlie’s Hannan's Club, or up the road in the Porter Street offices of Croesus, is largely because everyone has been forced to spend time explaining a number of curious matters related to both events, plus the fact that Croesus appears to be indulging in a process of detailed self-examination so painful that it cannot be described adequately.
Sold, on Tuesday, was the Davyhurst mine to a company which Minesite noted recently had never previously appeared on an investor radar screen, Monarch Resources. For the unprincely sum of A$5 million Monarch gets, according to the formal statement, 100 per cent of a “pre-loved� mine, technical data, accommodation village, a 1.2 million tonne-a-year processing plant, workshops, offices, and tools. Missing from the statement is a little bit of background on Monarch which, astute readers of Minesite will remember is the “second� corporate vehicle of, wait for it, Michael Kiernan.
There is, like most complex issues in life, an explanation as to the Kiernan linkage, and Minesite’s man in Oz has been rummaging around looking for one, because when he saw the November 8 Davyhurst sales announcement, in the light of Kiernan’s appointment today (November 10) as Croesus chairman, his antennae were twitching. How, he pondered could the two events not be connected, and what game was Big Mick playing at. Wasn’t it just a few weeks ago that he was walking away as chief executive of Consmin in high dudgeon over this treatment by certain institutional shareholders? And, wasn’t it just a little bit later that he recanted, and said he would stick around for an extra year as the boss of the company he single-handedly forged into one of Australia’s more successful base metal miners. Yes, it was. So, what’s our man Mick up to?
It appears that we outsiders are watching a complex set of manoeuvres which involve (a) two sets of corporate re-positioning and (b) two sets of personal re-positioning. The corporate shuffles involves Monarch looking for a meaning to life, before Kiernan makes his shift from Consolidated, and Croesus desperately searching for a meaning to life by recruiting a head-kicking chairman. The personal shuffle involves Kiernan taking steps which will accelerate his exit from Consolidated, while Croesus founder and chairman, Ron Manners, tries to step aside, though perhaps not quite far enough.
For non-followers of the saga a bit of background. Kiernan said last month that he was quitting Consolidated. Then, after an emotional annual meeting, he said he would stick around for an extra year. That decision, while no doubt taken for the best reasons, looked odd, nay sad because Kiernan had made it clear that he was on the way out and part of his attention would be transferred to Monarch. There is nothing wrong with any of this, except the change of mind.
What appears to have been happening in the background is that Ron Manners saw an opportunity to snatch himself a new chairman for Croesus which has suffered from chronic share price weakness, rising gold production costs and falling productivity, not to mention a few employees who were stealing some of the company’s gold. Manners asked Kiernan to replace him, while he kept the job of “emeritus� chairman, a truly bizarre title as the strict definition of emeritus means honourably discharged from service and/or retired. It will be fascinating to see how a very strong willed chairman Kiernan handles an equally strong willed emeritus chairman.
Meanwhile, while the corporate shuffle was underway, Kiernan’s other company, Monarch, was bidding for the Davyhurst mine being sold by Croesus. According to a spokesman for the deal, the Davyhurst sale process was underway before, and separate to, the Kiernan/Manners deal. A firm called Prime Corporate Finance, run by an ex-Rothschild staffer called Liam Twigger, was handling the Davyhurst sale and Monarch won it with the best bid. Kiernan is said to be far from amused that some people are drawing the wrong conclusions.
Annoyed he might be, but there is a certain messiness about the whole affair, including Kiernan’s indecision at Consmin, the Monarch purchase of a Croesus asset, followed by Kiernan’s appointment as Croesus chairman two days later, the curious decision of Manners to retain some sort of honorary role, and the “mea culpa� message in his chairman’s address today. Included in the presentation from Manners was a gold cost production graph which showed Croesus costs at close to A$600 an ounce in the September quarter compared with other companies which were below the A$200/oz mark, and a productivity per employee graphic which had Croesus at little more than 100 ounces per employee and other companies at more than 350 ounces per employee.
On the Australian stock market there has been a mixed reaction to the game of musical chairs combined with pass-the-Davyhurst-parcel. Croesus was up A1 cent to A32.5 cents, a modest gain when measured against the 12-month share price high of A69 cents. Monarch investors greeted their purchase of Davyhurst by knocking A2 cents off the price, down to the same price as Croesus, A32.5 cents. Consolidated was also a little weaker, losing A 6 cents to A$3.27.
To a casual observer, there is little doubt that Croesus needs a firm hand. There is also little doubt that Kiernan is looking for a life after Consolidated. But, this week’s events beg the question as to what anyone is actually achieving.Kiernan is still at Consolidated ….and Monarch, and Croesus. Manners is still at Croesus, albeit in an honorary capacity. At some point someone will say “chaps, it’s time for a clean break from the past – for all of you�. At that stage Kiernan may have to declare whether he prefers Croesus ex Davyhurst to Monarch cum Davyhurst, or vice versa, and why. Should be interesting!!
Companies featured in this Story Monarch Resources Ltd (ASX-MRS) Croesus Mining NL (ASX-CRS)
CRS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
