BeMaX Stock Goes to the Max
21 July 2005 Australian Financial Review
Shares in mineral sands producer and explorer BeMaX Resources NL soared to a record 21 ¢ yesterday after the group's main shareholder lifted its stake to 32.7 per cent.
Saudi Arabia-based Cristal Australia exercised 50 million options at 13.5 ¢ each, providing BeMaX with an additional $6.75 million in cash.
Exercising the options lifted Cristal's stake from 28.74 per cent to 32.7 per cent, although Cristal is exempt from making a takeover offer.
Cristal held a previous exemption from the Australian Securities and Investments Commission that allowed it to lift its stake to 47 per cent of BeMaX, but its stake in the company has been diluted through subsequent equity issues.
Yesterday BeMaX managing director Tony Shirfan said BeMaX's record share price could not be explained solely by the exercise of the options by Cristal.
"I cannot explain it. Perhaps people are seeing value in BeMaX there is certainly good value there," Mr Shirfan said.
The Cristal options were due to expire on September 19 but the company decided to exercise them early, "before they all went on holidays no one stays in Saudi Arabia in August and September".
BeMaX is developing the Ginkgo mineral sands deposit in the NSW part of the Murray Basin, about 120 kilometres north of Mildura, as part of its Pooncarie project.
The $176 million project involves a mine and a mineral separation plant at Broken Hill.
Mr Shirfan said development of the project remained on schedule and within budget.
A mining lease was granted in March after the completion of all permits, including native title agreements and environmental and planning clearances.
"The total budget for the Pooncarie project is $176.4 million, which includes an $8 million contingency," the company reported last month.
"At this advanced stage of development, with all key contracts either executed or in the final stages of documentation and many executed on a lump-sum basis, it is not anticipated that this budget will need to be revised."
The Ginkgo deposit was discovered in late 1998 and has since been extensively drilled out.
It is one of the larger single, coarse-grained, rutile- and zircon-rich deposits in the Murray Basin.
Production from the mine will begin in December and from the mineral separation plant in March.