26/08/2003 - 22:00

The burdens of a full purse

26/08/2003 - 22:00

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WHAT is worse than not having enough money? For some people, dear souls, it is the problem of having too much.

WHAT is worse than not having enough money? For some people, dear souls, it is the problem of having too much.

Once you have stopped laughing consider the dilemma of two Perth lads, Jubilee Mines boss Kerry Harmanis, and Straits Resources chief Milan Jerkovic, a couple of chaps who struggle to sit upright these days because the wallets in their back pockets are so fat they always lean to the left.

Kerry first. As a boy he was one of nature’s happiest, loudest and most outrageous creatures with a wicked sense of humour.

Tim Holmes, chairman of Homeloans Ltd, still remembers the famous incident of the missing mattress, mainly because it was Holmes who thought the bed in question was a safe place to crash after a boozy night, only to fall straight through to the ground.

Today, Kerry has that worried look of someone hunted which causes Briefcase concern because the only worry on the horizon seems to be his inclusion on the list of Australia’s richest people.

At Jubilee’s recent share price of $2.72, Kerry’s 20 per cent of Jubilee is worth a cool $66 million.

Perhaps the problem is that a few weeks ago, during the hype of the Diggers & Dealers forum in Kalgoorlie, when Jubilee hit an all-time high of $3.02, Kerry’s stake was an even cooler $74 million.

A missing $8 million is enough to make any man miserable.

Then again, the issue could be how to maintain the Jubilee momentum.

Success brings a price. It’s called doing it again, and again and etc etc.

Lleyton Hewitt’s musings about switching to football are a symptom of the "not again" syndrome.

At Jubilee, the problem is riding the tiger of a booming world nickel price, finding more ore at the rich (but small) Cosmos mine and deciding whether to spend the profits flooding through the front door on dividends, exploration or acquisitions.

Poor Kerry. No wonder he looks like a man longing for the simple days of plotting the downfall of Holmes, or roaring around the UWA campus in his law school days, the only kid on the block with a lime green Porsche.

On a more serious investment note, the issue is one of what can Kerry do to keep Jubilee rising, or is the current nickel boom (like all before it) doomed to be a short-lived bubble, and the market senses the difference.

 

 

MEANWHILE, over at Straits Resources in West Perth’s Ventnor Avenue, no more than a few hundred metres from Jubilee’s Outram Street office, sits Milan with an even bigger, but less personal problem.

Milan is managing an $86.4 million pot of cash, courtesy of the sale earlier in the year of the Nifty copper mine.

Milan’s challenge is a replica of Kerry’s.

How to invest wisely, while 1,300 shareholders peer over your shoulder and wonder whether you can do something as "nifty" as last time (that comment comes with apologies to all readers who dislike puns)?

The market senses Milan’s predicament.

Since Straits soared from 40 cents to 66 cents on news of the Nifty exit the stock has been bogged in the mid 50s, with a recent price of 56 cents valuing the entire business at $48.5 million, roughly half the cash backing of the 86.5 million shares on issue.

For some investors the gap between the share price and cash backing is a red hot buy signal.

 

 

ENOUGH of these people with too much money.

How about a bit of real fun?

For that we turn to Haoma Mining, a blast from booms past and a stock with a guaranteed "newsy" future because the former managing director of WMC, Hugh Morgan, has just joined as a consultant to the company which plans to mine gold near Charters Towers in Queensland.

The last time Briefcase looked two of the other chaps involved with Haoma were pollster Gary Morgan, and former rice farmer and footballer, John Elliott.

The market certainly smells a bit of action with those boys on board.

Over the past few weeks Haoma has doubled from 5 cents to 10 cents – which just happens to be exactly the exercise price of the two million options issued to dear old Hugh.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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