ITS name may belie its age, but Australian Heritage Group seems about to deliver shareholders a bounty.
ITS name may belie its age, but Australian Heritage Group seems about to deliver shareholders a bounty.
Just 18 months old and listed barely six months, this public investment banking outfit has vigorously pursued a higher risk strategy, scoring some of Western Australia’s best grassroots resources exploration projects through its wholly owned subsidiary Mineral Securities.
Two of these ventures, in companies about to list on the ASX, could deliver Australian Heritage up to four times the return on its seed investment, while providing Australian Heritage shareholders with allocation entitlements.
Australian Heritage Group managing director Sally Capp said Sally Malay Mining, expected to float next month, was chosen as an investment project because of its comparative commercial potential and quality management.
The company holds the proven Sally Malay nickel deposit in the Kimberley, plus four other regional mining leases bought from Normandy Group Trading.
An unsuccessful bidder for the Sally Malay deposit, Australian Heritage was nevertheless successful in convincing the new owners to allow it to fund the pre-feasibility study and, as a six-million share investor, to give Australian Heritage shareholders preferential allocation in the imminent float.
Another company in which Australian Heritage has a significant stake, West Musgrave Mining, holds exploration licences in the highly prospective Musgrave Ranges, close to Western Mining Corporation’s holdings.
West Musgrave will list in August, with Australian Heritage share-holders again able to qualify for preferential allocation.
“One of Australian Heritage’s original aims was to be an investment club, where people could not only hold Australian Heritage shares, but also participate, through allocations, in its investments,” Ms Capp said.
Australian Heritage is perhaps unique from other investment funding groups, seeking a greater than normal risk for a higher than normal return expected from most investment houses.
“Australian Heritage invests in a systematic way, actively seeking opportunities to
take on a higher risk profile,” Ms Capp said.
With minerals projects the company specifically looks for unrecognised deposits with commercial profitability in a recognised prospective area, as well as personnel with appropriate management experience and expertise.
Due diligence and investment proposals are completed by a committee, with the Australian Heritage board making the final decision as to whether the return on a project could be worth the initial backing.
If so, Australian Heritage then invests seed capital and supports and promotes the initial start-up of the venture, but also reviews input, potential for return and exit strategies each month from then on.
The way the company does business appears to be paying off, not only with the upcoming floats, but with a healthy share profit already scooped from Platinum Australia, on the way to increasing its exposure and further potential profit from the fledgling company through three million options.
This success has not remained unnoticed, with between 20 and 50 new and unsolicited proposals arriving on Australian Heritage’s doorstep each week, and not only from Western Australian projects.
“We’re becoming recognised as being a supportive company, making clever higher risk investments at an early stage,” Ms Capp confirmed.
For a company seeking to make strategic Western Australian resour-ces investments available to its shareholders, it is surprising that Australian Heritage has not secured any energy projects.
While Australian Heritage was looking at a few energy-related projects, Ms Capp said the company was still seeking a project with the right entry-level price and equity for the risks involved.
And although many energy projects consumed large quantities of seed capital, Australian Heritage expected to find a good energy project investment within a year.
“We’re keen to identify green-type investments, so we could do something in renewable energy,” Ms Capp said. But for now the company is holding its breath over the West Musgrave and Sally Malay floats.
“These will set the market value of Australian Heritage,” Ms Capp said.
“It’s exciting.”
