tuart quick $$$$$, page-2

  1. Article on Tuart in yesterday's The West Australian.

    Rumour has it that there may be more news to come.

    I bought some this morning looking for 1.5-2c.

    This is a real spec, though.

    Tuart teams up for red

    By John Phaceas

    STRUGGLING explorer-cum-winemaker Tuart Resources is to team with premium Frankland River wine maker Alkoomi to explore the potential of a premium red wine from the Donnybrook region.

    Fresh from winning shareholder approval to issue shares worth up to $10 million and haul the company back from the brink of liquidation, Tuart last week struck a deal to supply a substantial tonnage of red grapes from its Preston Vale and Diamond Ridge vineyards at Donnybrook to Alkoomi, one of the Great Southern's most decorated premium producers.

    Under the terms of the deal, Tuart will supply Alkoomi with about 250 tonnes of red grapes from the 2002 harvest for processing and bottling.

    In the interim, negotiations will continue to sell all wine produced for Tuart by Alkoomi to an unnamed wine marketing group.

    "The company believes that committing some of the harvest to this value-adding process not only offers a better return to growers, but also takes an important step towards creating a premium wine product from the Geographe (Donnybrook) region," Tuart managing director Bob Hendrie said.

    The Alkoomi deal comes as Tuart seeks to resurrect its ailing balance sheet by focusing solely on its wine-related businesses, despite the multi-million-dollar losses that followed their acquisition by Tuart in 2000, and which remain the subject of litigation against Tuart's former advisers.

    Under the recapitalisation plan put to shareholders earlier in the week, the company hopes to issue more than 675 million new shares to existing shareholders and new investors at 1.5¢ apiece to erase $6 million in debt and provide sufficient capital to make the vineyards profitable within two years.

    The company subsequently plans an equity buy-out of investors in the managed investment schemes governing the vineyards to simplify ownership of the assets and give Tuart full access to project cash flows.

    Tuart has now secured sales contracts for more than 1000 tonnes of grapes from the 2002 harvest, with local producers Evans & Tate, Alkoomi, Hope Estate and Ferngrove Estate.

    All white varieties have been fully committed at a base price of $1200 per tonne, except for semillon, which will sell for a fixed price of $700/t. Only about 200 tonnes of this year's vintage, mostly cabernet sauvignon, remain uncommitted.

    Tuart said "progress payments" totalling $140,000 were due mid-week, while the balance would be received over the next six months.

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