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Ron Manners’ ideas
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In 1990, as Chairman of Croesus, I made a promotional visit to Hong Kong. I then went to Frankfurt, Munich, London, New York, Vancouver and back to Hong Kong. 15 shareholders and Croesus supporters came to an event we held at the Mandarin Oriental Hotel. A brief slide presentation was given, along with Q&A and drinks.

The purpose of the visit was:

  • To present a face-to-face report on Croesus’ current position and plans
  • To meet an earlier commitment of the above on an annual basis
  • To put as many possible purchasers on notice that they should be watching Croesus closely over the next few months as we are all well placed to enjoy exploration success and enhanced gold production should the A$ gold price increase
  • Such buying, to flow from above, would enhance our almost impossible task of having a successful option exercise program completed.

Why Hong Kong?

At the time I wrote:

There is still good potential for speculative funds from Hong Kong to come in and support companies like CRS when a specific reason is present. They won’t accumulate stock just on the basis that we have a good exploration program going and don’t have any debt.

From an interview with Hong Kong Standard I expect a reasonable report with the emphasis on our aggressive exploration program.

Most of the big investment trusts up there have lost a lot of client’s money from their general perception of much more bad news yet to come from Australia colours their enthusiasm in this direction.

John Greenwood, the Chairman of GT Management, in particular is convinced there will be one final ‘flush’, particularly involving property markets, before the longer term healing process sets in.

I found that CRS is well known and well regarded, even by people who I met for the first time. However, my message was somewhat similar to last year’s so I feel that next year we need to ‘spring’ some positive surprises to maintain audience interest.

Media release

This is the media release we sent out at the time (September 3, 1990):

Croesus Mining maintains sound growth — company Chairman in Hong Kong

Ron Manners, Chairman of the West Australian gold producer, CROESUS MINING NL, is in Hong Kong for meetings with institutional investors and stockbrokers.

Mr Manners said in Hong Kong today, “I am confident that investors will be able to see that with a current share price of 12 cents Croesus is undervalued. The company has no debt, working capital of A$5.5m, gold reserves with a net tradable value of A$4.8m, a treatment plant conservatively valued at A$3.5m and an extensive portfolio of sound exploration properties including two mineral sand projects”.

Croesus recently announced net profit of A$400,000 for the fiscal year ended June 30, 1990 followed by the previous year’s loss of A$2.6m. This considerable A$3 million turnaround was achieved despite a low gold price and a high Australian dollar.

West Australian stockbroker, Porter Western Limited, in a recommended “buy” report of Croesus Mining just released, drew attention to the company’s proven record of management expertise and commitment to reward shareholders through past dividend payouts. The broker commented on the management’s ability during a depressed gold market to “squeeze profits out of the Hannan South Treatment Plant and through toll treatment arrangements”. Porter Western valued the company’s share conservatively without taking into account the value of the extensive tenement holdings at “at least 17 cents”.

In their report Porter Western state “the company has built up an impressive exploration portfolio. Although the main emphasis is on gold exploration in the Kalgoorlie region and the advanced Jupiter joint venture, large tenement holdings covering mineral sands and base metal targets attest to the diversification of commodities sought. The quality of the tenements is highlighted through the presence of major mining companies that have farmed into them.”

“The company has been able to maintain annual (gold) production at 12,000oz plus. We are hopeful that this level will be maintained over the coming year. Given the scenario of a strengthening gold price in the short term, we would expect Croesus to commence development of the Mystery Mint deposit during the latter half of this financial year. In addition should the Jupiter joint venture partners to be able to lock in forward sales for the project in excess of A$600oz and obtain project finance, Croesus could well see earnings substantially increased from 1991/92 onwards”. The broker estimated gold production and earning as follows:

88/89A         89/90A        90/91E         91/92E            92/93E


Hannan South                           12,857             12,478        13,000           13,000             13,000

Jupiter                                        –                          –                  –                     21,000             26,700

Revenue (A$m)                       7.4                     7.4                 7.8                 18.8                  23.4

Net Profit (A$m)                       (2.6)               0.4                 0.7                 2.5                    3.8

Croesus’ wholly owned Mystery Mint deposit consists of an outlined reserve of 133,000t at 5.6g/t to 110m. In recent months the company has increased reserves. Mineralistation is reasonably continuous and open at depth. Further several anomalous areas have been defined along strike of the host gabbroic unit. With the final feasibility study completed the company is awaiting a suitable time to lock in attractive forward sales.

The company’s joint venture partner, Homestake Australia Limited, reported recently that an eight hole deeper structural diamond drill testing of the Golden Mile Dolerite on the 7,968 hectare Kalgoorlie South project, one of the largest exploration ventures in West Australia, would begin shortly. Comments Porter Western, “Homestake certainly is excited about the potential for discovery of economic mineralization and will spend A$8m to earn a 75 per cent interest up until December 1996.”

Ron Manners said that the long awaited diamond drilling program was the culmination of many years of exploration and reinterpretation of data from earlier drilling programs over the area. “This, together with a greater understanding of the Golden Mile structural geology, will aid us in our research for a repetition of the Golden Mile.”

Croesus, in joint venture with Australian Gold NL, has recently completed a final feasibility study of the Jupiter project. A total reserve of 230,000oz is present in the Joanne and jenny zones. Annual gold production is estimated at 43,000oz in the first year gradually increasing to 58,000oz in year 3. Comments Porter Western, “Although Croesus is cautious on the likely go-ahead of the project in the short term, they must be quietly confident that given the current gold price the prospects of obtaining project finance and locking in good forward sales must be good. If the project is given the all clear shortly we would expect to see production commence in 1991/92”.

Mr Manners will be in Hong Kong until September 3 and can be contacted at the Mandarin Oriental Hotel.



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