Secretive gold miner Tribune Resources offered to buy out Northern Star’s share of the lucrative East Kundana gold mine near Kalgoorlie in response to Northern Star’s “insulting” offer for Tribune’s stake in the mine.
In his first media interview, Tribune executive director Anton Billis told The Weekend Australian that the company had approached Northern Star with an offer well above the $150 million that Northern Star had made for the 49 per cent of East Kundana held by Tribune and its sister company Rand Mining.
The approach, through Tribune’s advisers Argonaut, was swiftly knocked back.
“We would buy it straight away if we could. We could get a cheque to them in 10 minutes,” Mr Billis said.
“It’s impossible for them to sell it because it’s their prime asset.” The tussle between Tribune and Northern Star took on a new twist last week when Evolution Mining pounced on a 19.9 per cent stake in Tribune. The parcel of shares had only come on to the market as the result of a Takeovers Panel ruling found that the market had been “materially misinformed” about the true ownership of Tribune and its sister company Rand Mining, and in particular the stakes held by Mr Billis and his wife.
The Takeovers Panel ordered the sale of Rand’s shareholding in Tribune as part of its remedies. Northern Star moved amid the uncertainty, making its cash offer and highlighting what it said were “past and ongoing breaches of the Corporations Act”.
It was a move that clearly angered Mr Billis, who pegged the original East Kundana leases in 1982. “Personally, it was an insult,” he said. “It’s a democratic society — you can offer $10 if you want to. But what they offered was insulting. I didn’t even bother to reply to them, I didn’t want to step down to their level.” Ore from East Kundana is trucked more than 50km for processing through Northern Star’s Kanowna Belle plant. But Evolution has an ore-hungry processing plant at Frog’s Legs, just 2km from East Kundana, which Mr Billis says represents a more logical destination for the ore.
Tribune and Rand have previously been able to split out their 49 per cent share of the ore out of East Kundana for processing elsewhere, and Mr Billis said a similar move remained a possibility. “We’ve done it before and we can do it again,” he said. “If we do some deal with [Evolution chairman] Jake [Klein], the company can save a lot of money and that’s better for shareholders.”
TBR Price at posting:
$4.10 Sentiment: Hold Disclosure: Held
