New team lifts miner

The appointment of a new board and executive team in June 2006 heralded a revival in the fortunes of Western Metals Ltd, which has been ranked as the best performing Western Australian stock last financial year.

Western Metals had a chequered history as a base metals miner, falling into administration in 2003.

Like many failed WA companies, it was taken over by Ascent Capital’s David and Gary Steinepreis under a deed of company arrangement and cleaned up, ready for a new life.

The stock relisted on the Australian Securities Exchange in November 2005, capitalised at $6 million and with cash reserves of $3 million.

Its main assets were a joint venture agreement over several uranium exploration projects in Tanzania and a 60 per cent interest in a tin deposit in Tasmania.

Managing director George Bauk and executive director Geoff Chapman, who had previously worked together at WMC Resources and View Resources, took charge of the company last June.

The third new board member was non-executive chairman Peter Smith.

He announced this week he would be leaving his job with Ensham Resources in Queensland to take up a full time executive director role with Western Metals in Perth.

The company has recruited Queensland engineer and business executive Dr Chris Grieg as its new non-executive chairman.

Mr Bauk said the company had come a long way since June last year: staff numbers have increased from two to 18, the number of projects has lifted from two to five and cash reserves have grown from $3 million to $29 million (or $34 million).

The company has also delivered stellar returns to its shareholders.

Its share price has risen from about two cents last June to a peak of 46 cents.

It ended the financial year at 22 cents, giving shareholders a one-year return of 952 per cent.

Western Metals is best known as a uranium stock, reflecting the progress the company has made on its exploration programme in southern Tanzania.

However, Mr Bauk emphasised that the company has a mix of uranium, gold and base metals projects.

“We always said from day one we would have a diversified portfolio,” he told WA Business News.

Mr Bauk said his team had been very selective in the projects it acquired. “We’ve worked our networks very hard to find these opportunities.”

The company has acquired extra uranium tenements in Tanzania and established a uranium joint venture in Colorado in the United States.

It has also entered a joint venture in Peru targeting copper and has an agreement with BHP Billiton Ltd to explore for base metals in northern Queensland.

Mr Bauk said the company’s strong financial position gave it the capacity to progress projects more rapidly, follow up on successful results and add to its portfolio of projects.

The strong financial position was courtesy of a $32 million capital raising in March, via a placement at 24 cents per share and a share purchase plan at 21 cents.

Mr Bauk said the company had an aggressive approach to exploration activity and was also on the lookout for new projects, including more advanced projects that could be brought into production sooner than its current projects.

He added that the company would divest assets that do not meet its hurdles.

Mr Bauk said investors should be under no illusion about what they are buying into if they acquire Western Metals scrip.

“We are a high risk play so people that invest are looking for high returns.”