24/09/2009 - 00:00

Harmanis back for a second helping

24/09/2009 - 00:00

Bookmark

Save articles for future reference.

ONE fortune in a lifetime is enough for most people, but not if you are the 'golden Greek', a schooldays nickname for Kerry Harmanis, the man who pocketed $500 million less than a year before the 2008 stock market meltdown.

Harmanis back for a second helping

ONE fortune in a lifetime is enough for most people, but not if you are the 'golden Greek', a schooldays nickname for Kerry Harmanis, the man who pocketed $500 million less than a year before the 2008 stock market meltdown.

Mr Harmanis's first big pay day came when he sold his 20 per cent stake in the nickel producer, Jubilee Mines, to the global resources group, Xstrata.

His second fortune is forming inside his comeback vehicle, Talisman Mining, with Bystander calculating in this comeback column (after a two-year sabbatical) that Mr Harmanis has added about $5 million to his wealth over the past month.

The key to Talisman, in which Mr Harmanis has a 10 per cent stake, is a copper exploration project called Springfield, located about 150 kilometres north-east of Meekatharra, and next to the exciting Doolgunna discovery by Sandfire Resources.

During the past six months Sandfire's share price has rocketed up from eight cents to $2.50, a 6,000 per cent gain on an annualised basis.

Driving the stock, which has made its co-founder, Karl Simich, a wealthy man, are fabulous, world-class, assays, such as 26.2 per cent copper over 10.7 metres.

The copper, and associated gold, is found in a geological structure known as the Narracoota Volcanics, a slice of Western Australia that has never before hit the headlines.

The good news for Mr Harmanis is that the Narracoota Volcanics stretch out of Sandfire's tenement into ground held by Talisman, which is busily mounting a major exploration effort based on a well-founded belief that structures such as the Doolgunna VMS (volcanogenic massive sulphide) occur in clusters.

On the market, Talisman has doubled from 28 cents in late July to 57 cents totally on the promise of future exploration at Springfield and a belief in the exploration science known as "nearology" - if you're near enough (and the market is booming) that's good enough.

While Sandfire and Talisman will need to do much more work, the early signs are very encouraging, pointing to the possible development of a series of new copper mines in central WA.

Forrest back on top

MR Harmanis is not alone in building on his already impressive fortune. Another of Bystander's mining-sector favourites, Andrew Forrest, has reclaimed his title of WA's richest person, and perhaps the richest in Australia.

Just four months ago, according to BRW magazine, Mr Forrest suffered the indignity of forfeiting his local crown to fellow iron ore miner, Gina Rinehart.

His estimated fortune of $2.38 billion was said to be $1.1bn less than Rinehart's $3.47bn.

In the pecking order, and the numbers are only best guesses, that put Ms Rinehart on top of the WA rich list, and fourth in Australia. Mr Forrest was second locally and eighth nationally.

Times change, and so do stock market values.

While Ms Rinehart has probably stayed where she is, with no way of getting a quick fix on her fortune because she has no stock exchange-listed assets, Mr Forrest has been on the rise.

Since BRW ruled off its annual voyeuristic exercise in mid-May, Mr Forrest's master company, Fortescue Metals Group has risen to w$4.15. Given that he owns precisely 1bn shares in FMG, the rest is easy. Over the past four months Mr Forrest has "made" $1.55 billion, and cruised past Ms Rinehart, poor girl.

Gas fall-out

THE return to near-boom conditions in WA has been blamed on the go-ahead given to the $43 billion Gorgon gas project; and while everyone seems to be a winner, that might not be the case because a gas boom can also mean a gas glut.

Two prospective losers of a gas surplus are the politically correct but high-cost renewable energy industry, and the rust-belt states of Victoria and NSW.

The problem for renewables, such as solar, wind and geothermal, is that they are relatively expensive forms of energy at a time when the WA market is about to be flooded with gas.

No-one knows precisely what the future domestic gas price will be when Gorgon starts feeding into the Dampier-to-Bunbury natural gas pipeline, but it's a fair bet that more gas equals lower prices, especially as the real business of Gorgon is LNG exports and domestic sales are more of a nuisance to the project owners.

After Gorgon plumbs into the trunkline heading south, other gas projects will join in, with Woodside's Pluto development also certain to include a domestic sales component, because that's what Australian governments demand.

For South West consumers the looming gas glut, which should hit around 2014, is good news for their energy bills.

But, it also means the outlook is grim for renewable energy producers who need high prices to survive, or perpetual subsidies from government or customers

For WA, the prospect of a gas boom (and glut) is excellent news. For the rest of Australia it is a return to the embarrassing time when the resource states rocket ahead, and those states stuck with high-cost manufacturing industries suffer.

Over time, it will be gas (and perhaps uranium) that produces a two-speed Australia. There will be states with the resources that China wants, and those without, propped up by government subsidies funded by higher taxes on WA, Queensland and, to a lesser extent, South Australia.

Fortune in sushi

AS a final word it's worth returning to the question of fortunes because while governments can take them away, as Telstra shareholders have discovered recently, they can also make them.

Sam Sarin, Australia's 'tuna king', was estimated earlier this year to have a fortune worth $258 million. But that number might well have doubled over the past few weeks because the European Union wants to add Atlantic bluefin tuna to its list of endangered species, and ban catching the fish, which is an essential ingredient in sushi, Japan's favourite food.

No Atlantic bluefin means increased demand for southern bluefin of the type caught, fattened, and harvested at Port Lincoln in South Australia, higher prices, and more money for Mr Sarin and his fellow tuna kings, including dual Melbourne Cup winner, Tony Santic.

- The weekly Bystander column will run in the Opinion section of WA Business News from the October 1 edition.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options