Wednesday December 19, 2007, 1:52 pmIron ore producer Territory...

Wednesday December 19, 2007, 1:52 pm


Iron ore producer Territory Resources Ltd may pursue a merger with mineral sands miners Matilda Minerals Ltd and Olympia Resources Ltd in the next 12 months.

Territory chairman Michael Kiernan, who vowed at the firm's annual general meeting last month to pursue fresh acquisition opportunities, told AAP that his strategy was to ultimately build up Territory to produce about 250,000 tonnes of mineral sands concentrate.

The company, which intends building itself into a diversified carbon steel material producer through mergers or acquisitions, on Wednesday lifted its stake in Tiwi Islands-focused Matilda Minerals from 8.6 per cent to 13.66 per cent.

Territory acquired a 20 per cent interest in Indonesia-focused Olympia Resources last month.

"It's not going to be a full blown takeover or anything like that ... slowly, slowly creepy, creepy catchy monkey," Mr Kiernan, a non-executive director of Matilda, said.

"In a modest way, we want to build up a mineral sands business within Territory out of cashflow.

"I'll build Territory up to being a 15 million tonne iron ore company but, as a second string, it will be a mineral sands business, primarily in Western Australia."

Despite not being the flavour of the month, Mr Kiernan is bullish on mineral sands due to his firm belief in the future strength of China.

"Zircon is going to be in very strong demand for their tiles, glazing etcetera," he explained.

Mr Kiernan - who sits on at least half a dozen boards including India Resources Ltd, Windimurra Vanadium (formerly Precious Metals Australia) and Peel Exploration Ltd - says his main two vehicles will be Territory and Monarch Gold Mining Company Ltd, which operates the Davyhurst gold mine in WA.

"Those two business will stand alone because gold requires a different psyche to a bulk materials firm, which Territory will be.

"Of the others, one way or another, they'll come under the umbrella of Territory ... possibly including India.

"It depends on the strength of India, which is going gangbusters at the moment and may have a serious strong life of its own."

Monarch listed on the Dubai International Financial Exchange (DIFX) in June and Mr Kiernan intends to list both India Resources and Territory in Dubai some time next year.

He also plans to list Monarch on the Toronto Stock Exchange.

"Dubai is going to be a two or three year exercise to get traction," he said.

"I can see that DIFX three to five years down the road is going to be more significant that London's Alternative Investment Market and that's a big call but I just know the psyche of the ruling family and whole Middle East area."

Mr Kiernan did not comment on Territory's plans for multi-commodity explorer Northern Mining Ltd, in which it acquired a 15.7 per cent stake last month.

Territory backed out of the takeover battle for fellow diversified mining company Consolidated Minerals Ltd in September.

Shares in Territory were 4.5 cents higher to $1.315 at 1312 AEDT Wednesday while Matilda's shares were five cents, or 10.87 per cent stronger to 51 cents