US firm extends Sallies stake
Marc Hasenfuss
Posted: Mon, 05 Jan 2009
miningmx.com
[miningmx.com] -- NEW York-based emerging markets investment firm Firebird Management is now the biggest shareholder in struggling fluorspar miner, Sallies.
Firebird Global Master Fund, an affiliate of New York-based Firebird Management, is listed as the largest shareholder in Sallies in the group’s latest annual report.
The annual report shows that as at end-June 2008, Firebird controlled 19% (122.5 million shares) of Sallies ordinary shares as well as 19% of the recently issued Sallies Convertible Debentures.
Other major shareholder include retail tycoon Christo Wiese (via Titan Nominees) with 7.5% holding in Sallies ordinary stock, Standard Financial Markets (9.6%) and Pershing Securities (7.8%). Wiese also holds 10% of the convertible debentures, Pershing 19% and Trinity (Now Dale Capital) 16%.
Firebird’s large position in Sallies could lend some credence to the optimistic utterances from mining company’s management around the profitable production of fluorspar from the flagship Witkop mine.
The commodity market has changed markedly since Sallies’ financial year-end, and the share price suggests significant doubt remains in the market around the group’s fluorspar endeavours.
Firebird, though, is not an investor likely to be spooked by a few ructions in the commodity sector.
Firebird currently manages eight emerging market funds worth some $3bn, concentrating mainly on mining and bioscience ventures in the former Soviet Union, emerging Eastern Europe and (according to the company’s website) "exotic sectors worldwide".
Miningmx identified Firebird as a strategic shareholder in Sallies early last year. But it would seem Firebird - which has been bullish on fluorspar for a while – has since built a more commanding position in Sallies.
Fluorspar is used for the manufacture of hydrofluoric acid, which in turn is used in refrigerant gases as well as aluminium tri-fluoride.
Market sources suggest Firebird may even have increased its holding in Sallies in the last few months of 2008, taking advantage of the group’s weaker share price.
Corporate action possible
Firebird’s larger position in Sallies would not be surprising, considering the group’s reputation for going where angels fear to tread in investment markets.
The opportunistic Firebird is known for delving into industries on the verge of collapse, accumulated shares that are worth next to nothing and tilted at under-capitalised sectors.
But the most intriguing angle on Firebird is that the investment house also owns a strategic stake in Maghreb Minerals (an AIM-listed mining company with fluorspar rights in Tunisia) as well as Mongolian fluorspar interests.
Naturally this could lead to speculation around whether Firebird may wish to initiate corporate action at Sallies, possibly via consolidating its existing fluorspar interests into a single entity.
*The writer holds Sallies Debentures |
