Takeovers and investor demand for mining shares have sent resources stock prices soaring of late, but for some the road to riches has been a long one.
There is no doubt perseverance has paid off for lawyer-turned-prospector Kerry Harmanis, who is set to pocket more than $450 million when his company, Jubilee Mines NL, is sold to Swiss nickel mining giant Xstrata for $3.1 billion.
But Mr Harmanis’ story is one that is being replicated across the state as the mining men who scoured red dirt for years in search of precious minerals now find that their companies are in hot demand, either from investors buying stock or bigger players wanting the entire lot.
China’s insatiable appetite of Western Australia’s resources continues to propel the value of the state’s miners higher, and with it the wealth of the men and women behind the scenes.
There are now more than a dozen WA mining executives with share holdings in excess of $100 million, including four with holdings above $200 million and, of course, a multi-billionaire in Andrew Forrest, who is close to realising his dream of exporting iron ore from the Pilbara via Fortescue Metals Group Ltd.
Another winner from FMG’s booming share price is its operations director Graeme Rowley.
The wealth being created by WA business people is far from over, with a fresh wave of activity from mining services companies hitting the share market.
Brierty Contractors Ltd and Southern Cross Electrical Engineering Ltd are among the long-established private operators to recently plan market floats, with initial public offerings currently in the market to raise $60 million and $58.8 million respectively.
They follow a highly successful float of Kent Swick’s Mining Services Ltd.
While operating a listed company will be a first for Southern Cross founder Frank Tomasi, the mining game is nothing new.
He started the business in 1978 and has worked with a range of mining companies, including BHP Billiton, for more than 20 years.
Mr Tomasi is as busy as ever, but can recall the downturns during his 40-year career.
It was during one of those downturns, after the 1987 stock market crash, that Southern Cross expanded overseas, with its first project in Ghana.
Mr Tomasi said the expansion offshore helped diversify Southern Cross’ income stream but also helped the company retain its staff, with the prospect of remote locations viewed attractively by many of its employees.
“We say there’s a job in Ghana but you have to stop off in London on the way over,” he said.
Mr Tomasi, 65, is poised to collect $38.8 million through the listing of his company.
He will retain a 51 per cent stake in the group, which puts the 2003 Ernst & Young western region entrepreneur of the year finalist’s paper wealth in the same league as Bannerman Resources Ltd’s Clive Jones, Heron Resources Ltd’s Ian Buchhorn, and Mineral Resources Ltd managing director Peter Wade.
Mr Wade joins Michael Kiernan and Chris Ellison in enjoying the near 150 per cent jump in the mining services and processing company’s share price this year.
Mr Ellison, 50, founded Mineral Resources and retains about 40 per cent of the company’s stock, which has soared in value from $99 million at the start of the year to about $243 million this week, making him one of the state’s wealthiest miners, albeit on paper value only.
Another surging stock price has propelled the value of Tony Poli’s Aquilia Resources holding up by 117 per cent, up from $177 million to $384 million.
Mr Poli founded the iron ore and coal producer more than seven years ago with geologist and mining engineer, Charles Bass.
Mr Bass this week chose to realise some of the value he has amassed in the miner, selling two million shares off market to net $13 million.
His holding is now worth about $182 million.
Peter Harold has been another mining executive to realise some value for years of business risk, selling 355,000 shares in June to net $1.4 million. If he sold those shares this week he would have netted a little more than $2 million.
Mr Harold’s holding in the company has risen from about $10 million at the start of the year to $25 million – a long way from the days when he implored friends and colleagues to buy 20-cent shares through the initial public offering of the then nickel wannabe.
The stock hit the boards a few days after the September 11 terrorist attacks sent global stockmarkets into a spin.
The nickel miner spent its initial few years on the stock market dancing between 20 cents and 80 cents as it built up its projects.
During 2006 the stock began to climb, fuelled by a surging nickel price and production coming on stream. The stock has continued to be buoyed this year as investors seek out the next takeover target in the wake of Xstrata’s play for Jubilee, moving above $6 this week, a 190 per cent gain for the year.
This year has been steady as she goes for Kagara Zinc shares, which traded this week at $6.24, a touch below its $7.81 peak late last year.
Yet three years ago the stock was worth just 80 cents, which would put Kagara Zinc chief executive Kim Robison’s stake at just $14 million instead of the $109 million it was worth this week.
The rising fortunes of Terry Streeter are most likely being watched closely by a group of mining executives and stockbrokers behind Western Areas Exploration Pty Ltd, which is suing Mr Streeter and fellow Western Areas director David Cooper in a dispute centring on nickel assets that ended up in the float of Western Areas NL.
Mr Streeter has reportedly said he would not settle the case and would fight the matter in courts.
Like other nickel producers, Western Areas is enjoying the benefits of consolidation in the sector. Mr Streeter’s stake in the miner has risen from $124 million at the start of the year to $185 million.
He also has interests in Fox Resources Ltd and Midas Ltd.
