Late last week Milan Jerkovic, chief executive of Straits Resources, strolled into his local bank and slapped a cheque for $180 million on the table. Not bad for a boy from Ballarat.
Jerkovic pulled off one of the biggest deals at the junior end of Australia's mining industry earlier in the year when Straits Resources sold its Nifty Copper mine in Western Australia's Pilbara region to an Indian conglomerate. The cheque has now cleared and after paying off some debt and covering working-capital charges, Straits Resources is one of the most cashed-up miners on the boards.
It has $90 million in the bank, which gives the company a cash backing of nearly 80¢ a share. But for some reason the market hasn't caught on to the deal yet, with Straits Resources shares last seen struggling at 56¢ each.
A special dividend or capital return is certainly on the cards, with the company also diverting some of the funds to its existing mining operations. These include an 80 per cent interest in Indonesia's Sebuku coal mine.
SRL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
