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archive: transcipt of interview with walter pening

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    Hey Everyone, was up late doing alittle searching when i came across this and thought it was very interesting reading. Especially the price given for ruby..

    Some have all the luck PRINT FRIENDLY EMAIL STORY
    PM Archive - Tuesday, 5 October , 1999 00:00:00
    Reporter: Peter Martin
    COMPERE: Some guys, according to a song, have all the luck. Australia's biggest source of rubies and sapphires has just been uncovered, quite possibly the biggest source in the world. Under whose property does it lie? That of Kerry Packer, already Australia's richest man. He has generously agreed to allow mining for rubies and sapphires on a farm associated with his polo stud near Gloucester in the New South Wales Hunter Valley. The consideration, a mere 10 per cent of the takings and the right to acquire 51 per cent of the project. Our economics correspondent, Peter Martin, reports:

    PETER MARTIN: Kerry Packer's latest piece of good fortune, to own land near his polo stud, Freehold, with a deed that appears to give him rights to certain minerals discovered underneath it. The diamond miner, Kluff Resources, has been lucky too. It bought the company records of another mining company which no longer exists plus Chairman Walter Peningar [phonetic].

    WALTER PENINGAR: In amongst the package of information which we actually dug out of a storage area, was a packet of rubies.

    PETER MARTIN: You found the rubies ...

    WALTER PENINGAR: Well, I actually was searching for something completely different and I ducked my head into the safe and was looking for company seals for the company, and I pulled out this brown packet that looked like it might have company seals in it but, in fact, it said, "rubies, Gloucester."

    We went in there, I should say, in the middle of winter when it was snowing, and we recovered about 2000 carats of gemstones from that program. The rubies range in colour from red to pink, and we've subsequently had them cut both in Australia and over in Thailand.

    PETER MARTIN: What do they sell for each?

    WALTER PENINGAR: Anything from $100 up to $1500 a carat.

    PETER MARTIN: How many carats might there be there?

    WALTER PENINGAR: We've got what they call an inferred resource of four million carats, but that is only over about one-tenth of the area that's there in the alluvials. There's also the potential to discover the primary source of the rubies because we're talking about a drainage that's limited to only about ten kilometres where we're currently working. So there must be a primary source up there somewhere.

    PETER MARTIN: Did your heart sink when you discovered that Kerry Packer was owning the land in which these rubies lie?

    WALTER PENINGAR: I thought that it could be a good thing or it could be a bad thing, and certainly if he was interested in getting involved in the project it would be a good thing, and if he wanted to oppose it then it could be a very bad thing.

    PETER MARTIN: You did the exploration for the rubies. Is it legally clear who has the right to exploit the rubies on the Packer property?

    WALTER PENINGAR: It is very clear, it's the person who has the exploration licence or the mining lease.

    PETER MARTIN: So why do you need to have Mr Packer involved at all?

    WALTER PENINGAR: It's legally clear that we have the right to do it, but there are all sorts of advantages to having the owner of the property supporting your project. What we're saying is it's much better to have someone supportive than not supportive.

    PETER MARTIN: Especially when that person is Kerry Packer?

    WALTER PENINGAR: Well, we're delighted to have Mr Packer and his whole organisation. I mean, he has a very big organisation up at Elliston and he supports the district quite a bit.

    PETER MARTIN: He's a better person to have on your side in the district than against you in the district?

    WALTER PENINGAR: You won't hear a bad word said about Mr Packer in the district. They are all enamoured by what he's done up at Elliston.

    PETER MARTIN: Well, you're giving him the right to buy 51 per cent of the ruby project.

    WALTER PENINGAR: That's right.

    PETER MARTIN: Why have you felt the need to go that far?

    WALTER PENINGAR: Well, there are advantages. I mean, the rubies need to be marketed as well as dug out of the ground. We can see advantages in terms of involving Mr Packer in the operation in terms of future marketing ...

    PETER MARTIN: Well, this is with Channel 9, with the casino, with that sort of ...

    WALTER PENINGAR: Well, I think there's a lot of synergy there. If you can market the rubies as we want to do it, as an Australian product, any support that you can get out of Channel 9 or out of magazines or whatever would be very useful.

    PETER MARTIN: So you think you may have struck it lucky as well as Mr Packer?

    WALTER PENINGAR: In the sense that if you look at the sort of mark-up that's to be made in mining, miners generally get very low prices for their product. The people who get the mark-up, particularly in gemstones, are the people who value add and market. So I think there's a good niche there if we can exploit it in the right way.

    COMPERE: Walter Peningar, Chairman of Kluff Resources, and soon to be partner with Kerry Packer, talking to Peter Martin.


    So there we all have it from the horses mouth so to speak.. Rubies sell for between $100 and $1500, that was in 1999.
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