By Ian McIlwraith, businessday.com.au
Irrepressible mining entrepreneur Joseph Gutnick is back in control of a diamond explorer — and with half a chance at a mine.
“Diamond Joe”, as he was once dubbed after his Great Central Mines found micro-diamonds in Western Australia nearly two decades ago, is now in the driver’s seat at North Australian Diamonds.
Mr Gutnick is not only executive chairman, he is also managing director, and at the moment is guaranteeing the raising of about $6 million by North Australian to finance its exploration plans.
Formerly Striker Resources, North Australian was put together by a team of experienced diamond hunters associated with Australia’s famed Argyle diamond mine in Western Australia.
North Australian’s chief executive, Tom Reddicliffe, is credited with discovering the Merlin diamond pipes in the Northern Territory which became a short-lived but lucrative mine for minerals giant Rio Tinto.
In 2002, Merlin produced Australia’s largest diamond — the 104.73 carat Jungiila-Bunajina — but the mine was closed just over a year later and the tenements bought by North Australian.
Mr Gutnick’s ascension at North Australian is no accident. He says he tried to buy the tenements after Rio closed Merlin, and his US-listed Legend International Holdings has quietly amassed exploration leases around the outside of the Merlin properties, about 720 kilometres south-east of Darwin in the gulf country.
“Tom (Reddicliffe) says I have always had my eye over the fence,” laughs Mr Gutnick.
Legend, which is making its money mining phosphate just over the border in north Queensland, was valued at $US1 billion ($A1.5 billion) by the market in June, before the financial tsunami, but is now worth only $US90 million in spite of shareholders like George Soros backing it.
Mr Gutnick began buying North Australian shares in September, through another of his companies, Yahalom International Resource Corp. He now owns 18 per cent of the explorer, bought for an average 0.8¢ a share.
That stock is worth $2.5 million at the current 1.1¢ price, so Mr Gutnick is about 40 per cent in front.
His big risk, though, is Yahalom (the Hebrew word for diamond) underwriting North Australian’s just-unveiled issue of 750 million shares at 0.8¢ each. On a worst-case scenario, if the issue were totally rejected by investors, that would cost him $6 million but give him almost half the company.
“It’s probably the world-record raising in the present market — especially in the junior mining sector,” Mr Gutnick said, tongue firmly in cheek. “But at last I am in a kimberlitic, diamondiferous field.”
“I am very keen about the prospects for North Australian Diamonds. It’s my, hopefully, last 100 metres down the track.”
