POOR John Calvert-Jones, brother-in-law to Rupert Murdoch, has turned $7 million into $120,000 from a seven-year attachment to soon-to-be-rebirthed Range River Gold.
Calvert-Jones, who made his name as a stockbroker, has been a loyal supporter of Range River and its Mt Morgans gold projects since buying his first shares in 2005, but was unfortunately holding more than 11 per cent of the company when the music stopped a year ago.
He and his family investment company, Seafirst Australia, were also owed $1 million from convertible notes, which do not seem to have converted when due in March last year, given that he is listed as an unsecured creditor for that amount.
Not only was Calvert-Jones represented by a proxy at the early creditors meetings for Range River, at one of them the chief executive of Seafirst, Angela Rutherford, also popped in as an observer to see what was happening.
The good news for Calvert-Jones and other shareholders in Range River is that after more than 12 months of suspension, and a fair bit of disembowelling, they get to vote next month on giving the corporate shell a second chance at life and an ASX listing, thanks to Garrison Capital.
The bad news is that existing investors will own just a fraction of Range River after a 1-for-60 share consolidation and two subsequent share issues to get the company out of penury. Still, that is a teeny hold on something, rather than a big piece of zero.
The Garrison plan is to place 140 million shares at 0.5? each, raising $700,000, to provide some working capital, and then raise another $3 million at 2? a share via a prospectus.
Unfortunately, just over $2 million of that cash has to go to pay off Range River creditors and about the only one smiling there is likely to be Macquarie Bank, which looks like getting all of its money back.
It made a $4.5 million gold loan to Range River at the beginning of 2011, and was claiming $5.6 million in the administration. Insider hears it is still owed $1 million, and will get first dibs on the raising, underwritten by Garrison.
The explorer's appointed voluntary administrators from PPB Advisory, headed by Stephen Longley, have told unsecured creditors, though, to expect somewhere between 3? and 6? in the dollar on their claims. For Calvert-Jones' $1 million, for example, that would be a comparatively paltry return of $50,000.
His existing 212.95 million shares will be reduced to about 3.5 million, which at the prospectus price of 2? each are worth $70,000.
Garrison's Brian McMaster tells Insider that the plan is to retain some likely gold tenements in South Australia's Gawler Craton, which he thinks hold promise. Located about 100 kilometres west of the Stuart Highway (and three times that distance from the giant Olympic Dam), it is an area known for gold plays.
Still, there would seem to be plenty of assets in the family to keep the wolves from the door for Calvert-Jones, considering BRW magazine last valued them at more than $240 million.
Not only that, Calvert-Jones and Seafirst own the local arm of eco-conscious GreenTomatoCars hire company in Sydney, which uses a fleet of Toyota Prius vehicles (and a couple of new electric Renaults this year).
His bro-in-law seems to have been extraordinarily kind too, judging by the GreenTomato website: "The company's client base consists mostly of ongoing contracts with corporate clients concerned about reducing their environmental footprints. This includes BSkyB, GlaxoSmithKline and News Limited."
Two out of three ain't bad.
It's tough all over
GREECE lightning and the meltdown in China syndrome had already rocked resources stocks well before BHP Billiton chairman Jac Nasser delivered his own bolt from the blue at lunch yesterday.
BHP's market value has slumped by more than a third ie $80 billion from its $250 billion levels of a year ago.
Now the bust is pushing down into those who provide services to the mining boomers. Campbell Brothers, which went from cow-melting in Queensland to being one of the world's leading providers of laboratory analysis of mineral samples, this month ended its long March upwards on the back of Chinese demand.
As Insider predicted in February, it did break through the $4 billion mark in terms of market worth getting up to about $4.7 billion before shedding close to $700 million of that.
The shares did not quite make $70, peaking at $69.28, but suffering a $12.45 fall in yesterday's bloody trading and finishing at $57.85.
Drilling services group Boart Longyear, fell all the way to $3.12 by the close, a slip of 18? on the day but one which brought its aggregate losses to more than $1 a share this month.
In that same category, but significantly smaller, GR Engineering Services managed to be one of the few ASX companies to record a price rise yesterday after heartening shareholders with an earnings update that suggested its life was no worse than it had been in the December half-year.
GR Engineering only listed last year, but its 35 per cent fall in first half earnings has seen its shares drop from about $2 in late February to as little as $1.28 last week.
The statement yesterday said that it had maintained its profit margins in the second half of this financial year at levels of the first half, and expected earnings of $20 million before tax.
As seems to be the norm for almost every company telling the market that its profit is falling, GR Engineering offered no comparative figures. Insider can tell you, though, that its pre-tax profit last year was closer to $29 million.
That is a big differential, and once again highlights the need for either the corporate watchdog or its agent, the ASX, to step in and require some form of standardisation of profit warnings so investors do not have to hunt through the archives.
ONE other to keep an eye on in the resources space is Alumina Ltd, local sister to Alcoa, which has admittedly been losing money but has taken a fearful beating in recent times. In the past few days the shares dropped below $1, losing close to 20 per cent so far this month.
The explorer's appointed voluntary administrators have told unsecured creditors to expect somewhere between 3? and 6? in the dollar on their claims.