from business spectator2:03 PM, 12 Dec 2008Emerging iron ore...

from business spectator

2:03 PM, 12 Dec 2008


Emerging iron ore producer Golden West has hired Merrill Lynch to act as its corporate advisor as it looks to bring its Wiluna West prospect into production, and faces the possibility of corporate activity.

The Perth-based Merrill Lynch team led by Neville Gardiner replaces Golden West’s previous advisor, Azure Capital, which had worked on the company’s defence in the messy merger battle brought late last year by the smaller and feisty Fairstar Resources.

US-based Cleveland-Cliffs appeared on Golden West’s share registry last year when part of the Fairstar stake in Golden West was repossessed by Opes creditor ANZ after using the stake as collateral for a financing agreement that funded the purchase.

Cleveland-Cliffs, through its then listed but now wholly owned offshoot Portman Mining, bought 11 million shares for a total cost of $9.54 million. That 10.1 per cent stake is now worth around $3 million, although the company’s total stake is around 17 per cent.

Fairstar still holds around 18 per cent of its former merger target, and said in October that it had received unsolicited enquiries about the stake from interests in China, India and elsewhere.

Cleveland Cliffs has kept quiet about its intentions, but a bid, or at least a strategic link with Golden West would make sense because its ability to expand production at its Koolyanobbing operating is limited and the high grade resource at Wiluna West could use a spur line to link up with Portman’s infrastructure.