Important to remember with NAE that Colombian coal is not sexy just yet in the market compared to Mongolia or Indo, Hegarty and friends were after $200M but "only" raised about $45M for their colombian and russian coking coal projects, current market would not have helped either.
THE reception afforded to Owen Hegarty's Tigers Realm Coal so far probably isn't quite the triumphant homecoming the Oxiana founder would have hoped for.
Having initially aspired to raise up to $200 million, the company closed a scaled-back offer last week that brought in $45m ahead of an ASX listing on August 17.
Despite that, Hegarty is characteristically bullish about the future for TRC.
"I'm bloody excited about it -- it's our first publicly listed Aussie vehicle and the bloody asset quality is just sensational," the TRC chairman says.
The shortfall means TRC is almost certain to come back to market with another raising sooner than it originally would have liked, but Hegarty is adamant the exploration programs planned for the coming months won't be dramatically scaled back. TRC is Hegarty's first offering back in Australia after his controversial departure from OZ Minerals in late 2008.
Hegarty had enjoyed an almost peerless position as arguably the most popular and respected mining executive in Australia, before the merger of Oxiana with Zinifex created, in the form of OZ, a company that proved ill-prepared for the global financial crisis.
In the eyes of many, Hegarty's efforts in expanding Oxiana from a minnow into a multi-billion-dollar miner were overshadowed by the damaging debt issues that forced OZ to sell off the bulk of its assets during the global financial crisis and the accompanying concerns over OZ's disclosures.
Since those dark days, Hegarty has been focusing his energies between Hong Kong, where he is involved with two listed companies, and his hometown of Melbourne, where TRC's parent company, the private Tigers Realm, is based.
TRC is what Hegarty describes as the first of Tigers Realm's "cubs", a basket of suitably advanced exploration assets to be spun off on to the ASX.
At the core of TRC are coking coal exploration assets in Colombia and Far East Russia, two jurisdictions unfamiliar to Australian investors. The largely unknown nature of the regions TRC is targeting parallels neatly with Hegarty's early days at Oxiana, where he had to combat a similar lack of knowledge about Laos when convincing investors of the merits of the company's flagship project there.
Hegarty acknowledges that exotic locations, coupled with the bleak market and the early stage nature of the projects, meant the company had to settle for a smaller initial raising.
But he is confident that in time the investor support will come.
"All of the investors on our roadshows all love the people and the story and so on, but a lot of them can't invest either because of the market or because it's too early stage," he says.
"But there'll be a time for those guys. We've started to build up a relationship and confidence and credibility with a lot of those people because they'll be there eventually.
"We're talking about building a multi-billion-dollar business."
The funding TRC has brought in will fund hard-hitting exploration campaigns until the end of next year.
Hegarty expects drilling to substantially increase the projects' resource bases, and conceptual studies and a feasibility study in Colombia will give some early indications of the projects' potential economics.
He says the company has already had approaches from bigger coal players interested in partnering it.
"When you've got that sort of quality of coal, all the traders are all over you," he says.
But he believes it is still too early to bring in a cornerstone backer.
If Hegarty has his way, TRC will be just the first of a number of similarly named companies to appear on the ASX in coming years.
The private Tigers Realm recently raised more cash to pump into Tigers Metals, which holds a collection of copper-gold exploration projects in Indonesia, Thailand and South America.
"We've just raised about $10m internally to keep it all going strongly. That will take us through to around the middle of next year when we would look at a spin-out," he says.
Hegarty says he has no intention of reining in the exuberant manner that made him such a popular executive during the Oxiana days, but which came under fire as things soured at OZ.
"Right now, it's a question of demonstrating to the Aussie market, even though things are a bit tough right now, that we really do have quality here, and get out and beat the drum," he says.
"We will certainly use that same style."
As Tigers Realm Coal takes shape, Hegarty's two Hong Kong ventures continue to advance.
While the TRC offer was being scaled back, the Hong Kong-listed G-Resources, where Hegarty is vice-president, was winning strong support for a $HK1.7 billion ($197m) equity raising.
The raising was necessitated by a 30 per cent cost blowout at G-Resources' Martabe gold project in Indonesia, which is to come into production at the end of this year, a year later than expected.
Despite coming amid the same difficult market conditions that dogged TRC, G-Resources closed the raising oversubscribed in less than 24 hours and at a lean 9 per cent discount. The equity raising replaced original plans for a debt facility.
Rather than being a lesson from OZ's debt problems, Hegarty says the decision to go down the equity path is simply due to tough conditions in debt markets.
G-Resources acquired Martabe from OZ in 2009, and about 2000 people are on site at present as the project moves towards production.
Despite the project's teething problems, geotechnical issues causing the project's processing plant and tailings facility to be shifted during construction and the fact that G-Resources is still to produce any gold, the company has a market capitalisation of more than $1bn.
Hegarty's other Hong Kong play, CST Mining Group, is in the process of completing the $US470m ($427m) sale of its Mina Justa copper project in Peru to Swiss commodities giant Glencore.
CST also operates the Lady Annie copper mine in Queensland.
It is clear that, despite the role Hong Kong has played in reinvigorating Hegarty's career post-OZ, it is his looming return to the Australian bourse that has him the most excited.
NAE Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
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