Man with long-held mineral dreams may have tapped well of riches at last

LANCELOT reckons most of the screen jockeys riding today's sharemarket roller-coaster were not born in 1969, so the historic moment of Leslie White stepping aside as chairman of East Coast Minerals a week ago was probably lost on them.

It was the first move on the road to retirement for the 82-year-old director, who has been a tireless advocate for shale oil in his mini-stable of companies comprising Greenvale Mining, Esperance Minerals and East Coast, but plans to be out of his office in Sydney's Double Bay come his next birthday in January.

Gone will be the days of trying to run the explorers on the sniff of a shale-oily rag. In the Whitlam years, Leslie resorted to buying a hotel and using the income to fund exploration.

He is immensely proud of having had so few share issues. In fact, the last decent one in Greenvale was 1982, when he raised about $7 million, and he has drip-fed that into the company ever since.

Global markets are telling Lancelot, though, that shale oil's time might almost have come. Ironically, after all those decades of waiting for either oil prices or technology to make shale economic (and environmentally acceptable), the shift in sentiment is what enabled Boss Energy, with stockbroker Findlays, to make Leslie and his family an offer they couldn't refuse for their strategic shareholdings late last year.

By the time Leslie runs his last annual meeting of Greenvale in November, he will have had 39 years on the board.

Leslie's old mate and fellow one-time Hungarian, Gabriel Lorentz, stepped aside from the East Coast board in May - but he was a relative newcomer, having only been there since 1974. Back then, Leslie and Gabriel shared the boardroom with Walter Rivkin, father of Rene.

The other board retirement at East Coast in May was Elizabeth Stoliar, Leslie's daughter, who had racked up 24 years. Stoliar and Lorentz picked up a "massive" $22,000 each in retiring allowances on departure. Lancelot reckons your average company director wouldn't get out of bed for that.

Leslie says he won't take a retirement payment, but is content with the money received for selling most of his stock into the call option deal with Captain Starlight Nominees (owned by Findlays), acting on behalf of Robert Grover's Boss Energy, which was written with what, on the face of it, appears an extraordinary premium.

Boss is a fledgling, floated less than a year ago, but still managed to become enmeshed in the collapse of Opes Prime. It came to the market with oil shale leases in Tasmania, so buying into Greenvale is at least sticking to the knitting.

Exercising the Starlight option cost Boss about $7.5million for 2.2 million contributing shares in Greenvale. That's $3.28 a share after adjusting for the 15 a share still due on the call. For the record, Greenvale's contribs were trading at about 36 at the time of the option deal.

Leslie reckons that doesn't matter because Boss was pricing its investment on the predicted 3.5 billion barrels of oil equivalent in Greenvale's tenements - a price of about 2 a barrel. He says that offer was one of three that he weighed up.

The Greenvale leases potentially have far more in them than Boss' Tasmanian tenements, but whether spending most of the company's cash on them (and very little on exploration work) during the past year will please Boss shareholders remains to be seen.

Lancelot's glad his clients weren't among the Boss investors who took up stock in placements at 40 a share earlier this year - the price is now 15.5.

As part of the Captain Starlight deal, shares in East Coast and Esperance were also taken up by "other parties", leading to the changing of East Coast's boardroom guard, and change at Esperance too.

At East Coast, the buyers of the Leslie interests have a distinctly horsey flavour - the two Singaporean companies that have laid claim to the shares are named Gunsynd Investments and Pharlap Holdings. Whether the new directors have any connection with them is unclear.

If all the new shareholders in East Coast, Greenvale and Esperance are unrelated, however, Lancelot thinks they had best learn to get along because control of all three companies lies in their interconnected shareholdings.

The listed threesome jointly own a private company, Minga Pty Ltd. Greenvale owns 45% of Minga, Esperance 40% and East Coast the balance. While Minga only owns a handful of shares in Greenvale and 9% of East Coast, it is the largest shareholder in Esperance with 23.5%.

That's critical because Esperance is Greenvale's largest shareholder with 24.5%. It would also explain why the handful of Esperance shares (only 2.7%) in the option deal were priced at $3.38 when the market price was about 25.

At the less critical East Coast, shares under the option arrangement were bought for a more modest 54 each - but then again, the market was only 12 at the time, so that's nothing to sneeze at.

With such byzantine shareholdings, it does Lancelot's head in trying to work out who has the upper hand in all this. Bottom line is that about a third of each listed company is in the hands of their stablemates and the jointly owned Minga.

The only way you could have cracked that ownership nut for the group was to negotiate a deal with Leslie - something Findlay/Boss and others seem to have pulled off.

So if all the parties have paid up on the option agreements with Leslie and his associates, they have received about $13.25million for stock that the market said was worth only about $1.75 million at the time.

And after 40 years eking out exploration funds to chase mineral dreams, perhaps that's not too bad a retirement package.