Published on Wednesday May 7 2014 (AEST)
Andrew Forrest’s investments continue to range far and wide, with the mining billionaire today investing millions into a uranium junior just days after he bought a beef exporting company.
Mr Forrest has today pumped $12 million into Energy and Minerals Australia as part of a broader $36 million funds injection for the company.
The investment is a reunion of sorts, with EMA run by two men with prior links to Mr Forrest via his main company Fortescue Metals Group; Julian Tapp and Mike Young.
Mr Tapp was government relations advisor for Fortescue until 2012, while Mr Young led iron ore exporter BC Iron into a highly successful joint venture with Fortescue in 2009.
EMA is exploring acreage in the goldfields of WA which are prospective for uranium and base metals.
“My investment is a strong vote of confidence in the executive management team of Mike Young and Julian Tapp with whom I have had a long and successful working relationship,’’ said Mr Forrest in a statement.
Mr Forrest’s investment through his holding company ‘’Forrest Family Investments’’ will give him a stake of just over 27 per cent in EMA, and comes on the same day that Macquarie, Acorn Capital and Element Resources Fund agreed to covert their $24.5 million worth of debt into shares.
Mr Young said the investment would help unlock EMA’s future growth and potential.
It’s the second raising that EMA has completed so far in 2014, despite the deathly environment for uranium.
Mr Forrest’s investment comes just days after he bought WA food exporter Harvey Beef for an estimated $30 million.
But his stake in nickel junior Poseidon is shrinking, after the billionaire declined to participate in another equity raising by the nickel minnow.
Poseidon has today completed its second equity raising in the space of four months, and while the total raised this year – $7.5 million - may be small, it’s a big improvement on last year when the company couldn't raise money on several attempts.
Poseidon boss David Singleton said improved nickel prices were bringing investors back to nickel, and the company could have raised much more over the weekend had it not been prevented by an internal raising cap.
‘‘We were very heavily over-subscribed and we probably would have done more but we have bumped up against our annual raising capacity that we have permission for from shareholders,’’ he said.
‘‘It is unfortunate because having had a few bad years where it was quite hard to raise money, to get to the point where we were so heavily over-subscribed that we could have raised a lot more but to not have the capacity to do it is a little bit frustrating.’’
Nickel prices have improved by more than 25 per cent since January on the back of an export ban imposed by the world’s biggest nickel producer, Indonesia.
Mr Singleton confirmed that Mr Forrest had not participated in the equity raising.
Mr Forrest started 2014 with 33 per cent of Poseidon shares, but according to Bloomberg he now holds just over 27 per cent.
‘‘He will be slightly diluted as a result of today,’’ said Mr Singleton.
Poseidon must pay about $9 million in debts to Mr Forrest by October 1, and Mr Singleton said the company was considering asking shareholders for permission to raise more money, or possibly taking on new debt, to pay back Mr Forrest.
Poseidon is also reviewing quicker and cheaper ways to get its Windarra nickel prospect into production.
The company halted work last year as low nickel prices bit hard, but the improved climate could see preparatory work on site recommence soon.
‘‘The key next step for us is to recommence operations on the ground at Mt Windarra which we bought to a halt in June last year as the nickel market was going strongly against us. We are able to restart now and that will start to open up some other options,’’ said Mr Singleton.
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