THE Perth mining identity Michael Kiernan is aiming to rebuild...

THE Perth mining identity Michael Kiernan is aiming to rebuild part of his former mini-empire with the backing of a big Indian group.

Mr Kiernan's new investment vehicle, Stirling Resources, is asking shareholders to approve the purchase of a 19.9 per cent stake in the copper explorer Redbank Mines from his private company Crawley Investments.

Stirling would in effect reimburse Crawley for its purchase of the Redbank stake, which occurred before Mr Kiernan and his son gained control of Stirling's predecessor, Alexanders Securities, last month.

"When the market crashed I could see Redbank was significantly oversold," Mr Kiernan said. "Anyone who wanted to sell the shares, we bought."

Redbank owns a small copper mine in the Northern Territory that was recently closed in favour of conducting more exploration to allow it to produce 5000 to 10,000 tonnes of copper a year at a cost of $US1.50 a pound within two to three years.

Redbank also issued Crawley with $1 million of convertible notes, and Crawley agreed to repay a $1.5 million debt to Macquarie Bank by next month and underwrite a $3.5 million rights issue by March 31.

Stirling is seeking approval to take on Crawley's obligations and its stake in Redbank, at a cost of up to $6.87 million if it is forced to take up the entire Redbank equity raising itself in a deal deemed "fair and reasonable" by an independent expert. Stirling plans to conduct a $5 million capital raising.

Mr Kiernan acknowledged it was difficult at present to convince institutional investors to back small mining companies. But he said an Indian group with a market value of $40 billion was seeking to support Stirling in its efforts to buy the Redbank stake, along with an Australian coking coal project.

Last year two companies Mr Kiernan was associated with - Monarch Gold and the mineral sands miner Matilda Minerals - collapsed into administration. Mr Kiernan said Stirling had expressed interest in buying some of the assets of those companies from administrators.

Combined with the Redbank stake and the potential coking coal project, he hopes to restore his vision of building a diversified mining house after failing to consolidate his other companies through Territory Resources last year.

"We will add value," he said. "There is no doubt if you invest $1 today, it is going to be worth $5 in two to three years' time."