05/12/2007 - 22:00

KBR bounces on drill data

05/12/2007 - 22:00

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It was a lack of focus from Kalgoorlie-Boulder Resources that dampened its stock market performance since it listed on the Australian Securities Exchange almost three years ago, according to chairman Michael Atkins.

It was a lack of focus from Kalgoorlie-Boulder Resources that dampened its stock market performance since it listed on the Australian Securities Exchange almost three years ago, according to chairman Michael Atkins.

The company’s share price had brief bursts above its 20-cent listing price, reaching as high as 26 cents before spending the past 18 months sliding south, hitting as low as five cents.

KBR chased hot options such as uranium and oil and gas fields in America, but both strategies failed to deliver real value for shareholders.

Rubbing salt into investor wounds was a raft of other mining minnows that have lit up the boards during the same period.

Recently, however, shareholders have had something to smile about after a 20 per cent upgrade of KBR’s inferred mineral resource at its Norseman gold project backed up by some positive drilling results.

In the space of a week its shares had almost quadrupled to 26 cents.

KBR funded some its Norseman drilling program from the $1.75 million it received as a part of a deal renegotiated by Mr Atkins for sale of its uranium assets to Burey Gold. The original deal, done before Mr Atkins’ appointment, was scrip only.

Mr Atkins, who also manages Montagu Stockbrokers, became involved with KBR after advising US-based RASL AU LLC, which then owned the Norseman project with a company linked to Joseph Gutnik’s sister, Pnina Feldman.

RASL bought Ms Feldman’s stake, then sold the project to KBR, a deal which resulted in RASL becoming the company’s major shareholder with a 31 per cent stake.

The deal was formalised in March, when Mr Atkins assumed the role as chairman and RASL’s Stanley Lewis and Richard Alter became directors.

Mr Atkins said he has been keen to develop a stable, long-term investor base, which was part of the reason the company chose to raise $2.5 million though Patersons Securities, which principally placed shares among its Sydney investor base.

Mr Atkins said the company was unlikely to require additional cash if its share price remained strong, with options exercisable at 20 cents in July likely to pump about $10 million into reserves.

The company is also suing the vendor of its oil and gas projects in the US, Metro Energy Group Inc, in a bid to recoup the $3 million it spent acquiring the project.

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