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Macraes has another go

Chris Hutching

Friday 21st November 2003

Text too small?
Australian ore refiner GRD Macraes' proposed $117 million share offer was described as "extremely cheeky" yesterday by an investor still smarting from the takeover of formerly listed Macraes Mining just four years ago.

Local shareholders remember keenly the takeover by its 36% debt-laden shareholder GRD, part of the Churchill group of companies based in Perth. Macraes shareholders were incensed at the offer of one convertible redeemable preference share for every two Macraes shares, which saw the Macraes price tumble from $1 to 38c in a couple of weeks.

After a couple of court cases GRD was able to use its voting power to push the merger through.

Now GRD is planning to raise $114 million in a public offering to float Oceania Gold in New Zealand and Australia and about half the money may be used for the Macraes' operations in Reefton on the West Coast and in Otago, where it operates one of the largest open-pit mines in the world.

A couple of years ago it enlisted the help of public figures on the West Coast to pressure the government into giving it access over Conservation Department land at its Reefton prospect, holding out the promise of hundreds of jobs. To the disappointment of West Coasters the company shelved its plans and continued to argue with West Coast local authorities and DOC about paying a multimillion dollar bond and insurance for potential contingencies.

Now gold prices have doubled in three years to more than $600/oz GRD Macraes perceives the time is ripe to seek more money from shareholders.

The firm may use about $57 million for the Reefton mining project and for underground mining at Macraes, although it has yet to confirm either project and will make an announcement next year. The balance would be used for international operations.

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