No glitter, just gold in miner's bottom line

You could be forgiven for thinking that a chief executive who had just delivered a 150 per cent rise in profit and had $170 million of bullion stacked at the Perth Mint might be trumpeting his triumphs from the rooftops.
By · 11 Nov 2013
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11 Nov 2013
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You could be forgiven for thinking that a chief executive who had just delivered a 150 per cent rise in profit and had $170 million of bullion stacked at the Perth Mint might be trumpeting his triumphs from the rooftops.

Not the bashful Anton Billis.

You could also be deluded into thinking that the chief executive of a company trading on a PE ratio of just three - ostensibly the best value in the sharemarket - would be doing a song and dance about it.

After all, it is customary for a public company to spread its good news in order to inflate its stock price; equally to spin its bad news as good news to stop its stock price from falling.

Not Anton Billis. When it comes to the former prospector in charge of goldmining twins Rand and Tribune Resources, there is no one more demure, no one more reclusive in corporate Australia.

When Tribune filed its annual report the other day, an alert reader had to trudge through 11 pages of "stoping" and "graphitic phyllites" before noticing this furtive observation: "The profit for the consolidated entity after providing for income tax and non-controlling interest amounted to $27,775,577."

Here is a stock with 50 million shares on issue, a market cap of $151 million. It has not raised money since 2001, it spits out more than $500,000 in cash per week at a gold price of $A1400, and has $170 million in gold gathering dust in the Perth Mint. Its 51 per cent partner in the East Kundana Joint Venture - which produces 140,000 ounces of the yellow stuff each year at 12 grams a tonne - is the juggernaut Barrick Gold.

This is one pulsating cash cow. The mention of its 150 per cent lift in profits is the first and only mention of it and it precedes a note on page 60 - only discoverable by balance-sheet archaeologists - that part of the inventories have a market value of $145.653 million at a spot gold price of $1303, from which it can be deduced that the timorous Anton Billis is holding sway over some 111,780 ounces of gold (last year it was $131.674 million at $1574, therefore for some 83,655 ounces of gold).

The note refers to the balance sheet inventories reference of $111.157 million - gold held at cost.

On top of the $27.8 million of net profit after tax then, Rand and Tribune stored a further 28,125 ounces (at today's gold price of about $1400) or an extra $39 million in net profit before tax.

Here is one of the only gold companies in the country not to concede heavy write-downs in the past three months, indeed one of the only to enjoy a rising share price.

The first and last time we wrote a story about the enigmatic chief executive of Rand and Tribune, their share prices shot up 30 per cent and 60 per cent respectively. It is tightly held. And this is the problem, especially for minorities, that is, who are feeling a little oppressed.

That was back in April. The twins were then trading on a PE multiple of two. At $85 million, their combined market cap was described by Anton Billis as "about right". "The market is the best barometer of value," he said - it's now twice that and still cheap.

This time around, Billis was not available for comment. When asked for their perspective, however, some of his shareholders were not as reticent. The reason the stocks were so cheap was that they were largely immune to takeover because Billis controlled them via people he has described only as "Europeans".

Who are these mysterious Europeans behind Yarri Mining Ltd, Transglobal Capital, Sierra Gold, Lake Grace Exploration, Resource Capital?

The reason we ask is because the enigmatic Anton Billis declares that he owns only $40,000 or some 0.03 per cent of the stock in his own name but he has managed to control both companies with an iron grip for 20 years.

Part of it comes down to the interlocking shareholdings. Tribune owns 44 per cent of Rand, and Rand owns 23 per cent of Tribune, and together with the aforementioned holdings, appear to deliver the chief executive an influence over some 57 per cent of Tribune and some 70 per cent of Rand.

While Perpetual seeks to unravel the cross shareholdings between Soul Pats and Brickworks, and unlock value for minorities, this little tiger seems like Soul Pats on steroids.
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