04-Dec-2020:  While Tribune Resources and their sister company Rand Mining (RND) - who are run by the same management team and controlled by their founder and major shareholder Anthony/Anton Billis, can look like a bargain on paper, they both do have significant risks. 

The main risk is that the management have traditionally looked after their own interests ahead of the interests of ordinary retail shareholders.  An example of this is how they lied for years about the true ownership structure of both companies, which was the subject of a Takeovers Panel (TOV) investigation which made a number of adverse findings resulting in Billis and his associates having to sell quite a lot of shares that they had lied about being the beneficial owners of.  That investigation is what prompted Billis to liquidate a significant percentage of the gold that they held in the Perth Mint (held at cost on their books) and pre-pay the capital gains tax (to the ATO) and immediately pay two very large fully-franked special dividends in September 2018 (one by TBR, and one by RND).  The point of that was to release a decent percentage of that hidden value and distribute it to shareholders - remembering that Billis owns one third of the shares on issue for TBR and TBR owns 44% of RND.  At the time the special dividends were paid, Anton Billis controlled over 50% of TBR.  Billis is also associated with Trans Global Capital - who own 16.11% of TBR and 13.13% of RND. 

The largest beneficiary of those moves (selling the gold and paying the large special dividends) was therefore Anton Billis himself.  Following those dividends being paid, the share prices of both companies reduced significantly, by more than the grossed-up value of the dividends actually.  TBR dropped to below $4.  That would have been a great point to buy them in hindsight because they recovered in 2019 to hit highs of over $8 (getting as high as $8.44).  They are now back at $6.22 (yesterday's close).

I note that TBR is tightly held and the share price does move a lot on speculation of further special dividends funded by further sales of their gold held in the Perth Mint.  It is pertinent however that MOST of their gold was sold in 2018, and while there is still some left, and it is STILL held on their books at cost (not at market value), the drivers that were behind the September 2018 gold sale and special dividend are just not there now.  The motivation back then was that there was a very real possibility that Billis was going to lose control of his two companies, TBR & RND, as a direct result of the TOV investigation and their ultimate findings and recommendations to the ASX and ASIC.  He had managed to build of a huge store of wealth in the form of physical gold held at the Perth Mint that was recorded on the books at cost, and he faced the possibility of losing control of what happened to that gold.  That is why most of the gold was very quickly sold and the special dividends were rushed through, and I mean RUSHED through.  They were paid within a couple of days of the ex-dividend dates.  It all happened VERY fast.  I know, because I bought shares in both companies as soon as those two div's were announced - to share in those dividends - and then sold out as soon as the 45 day rule was satisified (so I could keep the franking credits) so I was watching it all VERY closely.

I have posted straws here previously about all of this - and they can be found under "TBR" - Tribune Resources.  Also - under "RND" - Rand Mining.

There are other things that I could say about Anton Billis, however I will simply suggest you google his name and look at some of the media articles about him over the past decade or more.  He has a history of suing people who say things about him that he doesn't like.

I am NOT saying that people should NOT buy TBR or RND shares.  I am simply suggesting that there is more to this than meets the eye - initially at least - and you should know what you're getting into, and the risks.  I have held shares in both companies on various occasions, most recently in late 2018.

One of the main risks is that most of TBR's and RND's gold has been produced by the EKJV - the East Kundana Joint Venture, which now has NST as the operator and majority owner.  Even before NST became involved, TBR and RND have always been junior partners and have never been the operators of the JV, so TBR do not process gold themselves.  They own a percentage of a high-grade gold province and they are entitled to a percentage of the gold that area produces - and they have to pay the operator the cost of processing that ore - to turn it into gold.  In recent years that operator has been NST (Northern Star).  During the period in which Billis was having issues with the Takeovers Panel over failure to disclose the true ownership structure of both of his companies, NST offered to buy TBR's and RND's share of the EKJV at what was probably, in hindsight, a fairly low price.  Billis refused to sell, and shortly after that we saw the dispute over toll processing of EKJV ore flare up, a dispute which is still unresolved today. 

So, to summarise, TBR's main asset is a minority share in the EKJV and they are in an as-yet-unresolved dispute with the majority owner and operator of that JV.

To muddy the waters further, when the TOV (Takeovers Panel) forced Billis to sell-down a large chunk of his TBR shares in late 2018 - because he beneficially did previously control over 50% of the company and yet had consistently denied having a controlling stake - who should step up and buy most of those shares?  NST's main rival, Evolution Mining (EVN) did. 

So EVN now own 21.05% of TBR, and remember that TBR own 44% of RND.  So EVN now have an indirect stake in NST's EKJV through their ownership of TBR (and a beneficial interest in RND), which probably doesn't sit well with Bill Beament, the top man at NST.  NST and EVN were jostling for years to be Australia's second largest gold producer - behind Newcrest Mining (NCM) and both held that position at various times.  Jake Klein's Evolution Mining (EVN) was overtaken by NST when Northern Star bought the Pogo mine in Alaska, and NST's #2 position was entrenched even further when they bought half of KCGM (whose main asset is the Kalgoorlie Super Pit gold mine).  That #2 position will become virtually unassailable when they merge with Saracen (SAR) in Feb/March 2021.  NST will then become one of the 10 largest gold companies in the world.

All this is to say that there is probably no love lost between Anton Billis at TBR and Bill Beament at NST, and all of Billis' gold is coming from the EKJV which is majority owned and operated by NST.  And Billis' TBR is in a formal dispute with NST.  The implications of that should not be underestimated. 

NST has indicated in an annoucement earlier this year that the dispute with TBR and RND is not material to them.  That's how big they are, and how small TBR and RND are.  And despite Billis' penchant for taking people and companies to court, NST has VERY deep pockets, and anybody who has followed Bill Beament's career (as I have) would advise others not to underestimate him or his resolve.

There was also a few years ago an iron ore project option - in Liberia I think it was, that if exercised would have seen RND own most of TBR and existing TBR shareholders get significantly diluted.  It would also have increased the cross shareholding arrangements between RND and TBR and made the true ownership even harder to fathom - at that time.  I'm fairly sure that option has now lapsed, but it was highlighted at the time by a newspaper article that I read as a reason why the apparent value within TBR looked too good to be true because it actually was too good to be true - in light of the various significant risks that ordinary shareholders in TBR faced at the time.  While that particular risk may now be gone (as far as I know anyway), the other remaining risks are real, and significant.

If you have a flick through the annual reports and announcements of TBR and RND you will see that they provide the absolute minimum information and details required by law.  They are not shareholder friendly or shareholder focussed, except in terms of the majority shareholders.  There is very little in the way of engagement by the company with ordinary shareholders.  That does NOT make them uninvestable, but it should be noted.

So - I've held them before.  I probably wouldn't hold them again.  You can make money out of them if you buy and sell at opportune times.  However, know what you're getting into.  There are risks here.

30-7-2020:  Quarterly Activities & Cashflow Report - June 2020

28-Jan-2020:  I haven't been following Tribune recently, but I noticed a new valuation for TBR was posted today by Karmast in which I thought he made some good points.  It also prompted me to have another look at TBR, because I hold shares in NST (Northern Star Resources) who are Tribune and Rand's partner in the EKJV (East Kundana Joint Venture) and it's Northern Star who are the operators there - and I remembered that they are currently in dispute - with TBR taking NST to court over a number of matters that they are not happy with.  The latest update on the proceedings was announced only this morning by TBR:

EKJV Court Proceedings Update

So Tribune now wants to get their ore processed elsewhere.  It's worth noting that while Anthony (Anton) Billis owns over half of the shares on issue, Evolution Mining (EVN) own 19.9% of TBR and EVN have been in a long-running battle with NST over the position of Australia's second largest gold miner - in terms of both market cap and ounces produced annually - behind Newcrest Mining - NCM.  EVN took the title from NST, NST then took it back, then last year EVN took back that #2 spot, until NST very recently bought Newmont GoldCorp's 50% share of KCGM (inc. the Kalgoorlie Super Pit) which has now propelled the NST share price to over $13/share and they've overtaken EVN once more. 

When Anton Billis got in trouble with the Takeovers Panel and ASIC in late 2018 and early 2019 over not properly disclosing his true ownership and control of Tribune and Rand Mining - and was forced to sell a large chunk of TBR shares (ASIC ordered Morgan Stanley to sell them for him), Jake Klein at Evolution was quick to pounce on the maximum he was allowed to buy (just below 20%).  At around the same time, Bill Beament at Northern Star offered to buy the 49% stake in the East Kundana Joint Venture (EKJV) that NST did not already own, from Tribune, Rand (ASX:RND) and Rand Exploration NL, for A$150 million in cash.  That offer was subsequently rejected as opportunistic and grossly inadequate by the boards of TBR and RND, as expected, and thus the EKJV partnership became somewhat soured from then on.  And then - this:

23-Dec-2019:  TBR Commences Proceedings against Northern Star Resources

and (same day):  NST: Northern Star response to Rand and Tribune

You've got to love that response:  "The proceedings are not material to Northern Star, and other than to confirm that the proceedings will be defended, Northern Star does not intend to make any further comment at this time."

So - in summary, while TBR can look quite inexpensive (cheap even), and may at times return substantial cash to shareholders (because the guy who controls the company owns most of the shares), it is a rather unpredictable beast, and is currently in a bunfight that could easily turn quite nasty with Australia's second largest gold miner, who also happens to be their senior partner - and operator - in TBR's only producing asset - East Kundana.  To complicate matters even further, a smidge under 20% of TBR is owned by Australia's third largest gold miner, who would very much like to reclaim that #2 spot that they so recently lost. 

It's certainly something to keep in mind.

By all means jump onboard.  But do so with your eyes wide open, recognising the risks.

http://www.australianmining.com.au/news/tribune-puts-faith-in-philippines-mining-industry/

[December 7th 2018]

I figured Anton had a plan...  Didn't know this was part of it though...

Saturday 17th November 2018:   Straw 1 (of 2).

Northern Star (NST), who own 51% of the EKJV (East Kundana Joint Venture, which TBR + RND own the other 49% of) have offered $150 million to Tribune (TBR) and Rand (RND) to buy their 49%.  The breakdown is $112.5m for TBR's 36.75% of the EKJV, and $37.5m for RND's 12.25% of the EKJV.  See here.

It seems like an opportunistic bid, and it is, but that's because the majority shareholders of RND and TBR could be in a world of trouble with the takeovers panel, who on Monday October 29 made the following orders:

Tribune Resources Limited – Orders

The Panel made a declaration of unacceptable circumstances on 14 September 2018 in relation to an application dated 20 August 2018 by R Hedley Pty Ltd in relation to the affairs of Tribune Resources Limited (see TP18/67).

The Panel has made final orders (Annexure A), the effect of which includes:

• vesting 12,025,519 Tribune shares held by Rand Mining Limited in ASIC to sell
• requiring the relevant parties (defined as Tribune, Mr Anthony Billis, Ms Phanatchakorn Wichaikul, Ms Buasong Wichaikul, Sierra Gold Ltd, Sierra Gold Pty Ltd, Trans Global Capital Ltd, Rand, Nimby WA Pty Ltd, Lake Grace Exploration Pty Ltd and Northwest Capital Pty Ltd) to provide corrective substantial holder disclosure in a form acceptable to ASIC
• prohibiting the relevant parties taking into account in determining whether they can rely on the 'creep' exception1 (i) the shares to be vested in ASIC and (ii) for a period of six months after the provision of corrective disclosure, any other shares in which they have a relevant interest or voting power, and
• an initial voting restriction until the date that is one month after the corrective disclosure is made and a further limited voting restriction to take into account the effect of ASIC not voting the vested shares. 

The full Takeovers Panel (TOV) announcement can be viewed here.

On October 31 TOV announced (see here) that they had received an application from RND seeking a review of the panel's final orders in relation to TBR and while they hadn't yet decided whether to hold a review or not, they had in the meantime made interim orders to stay all 4 of the final orders for up to 2 months - or until further orders are made - whichever comes first.  In other words, the largest shareholders of RND & TBR have been granted a stay of execution, but not a reprieve.  

Continued in a second straw...

Saturday 17th November 2018:  Straw 2 (of 2).

This is the second straw relating to the NST offer to acquire the 49% of the EKJV owned by TBR & RND for a total of $150m, as detailed in the first straw.

The Takeovers Panel (TOV) orders, which have been stayed for up to 2 months (from Oct 31) were made due to findings of unacceptable circumstances in relation to the major shareholders of Tribune (TBR), and 1 of those major shareholders is Rand (RND).  The chain of events can be followed by clicking here, then here, then here, and then here.  The latest TOV announcement regarding the interim "stay" orders can be viewed here.

During this time, Tribune and Rand (which are managed by the same people, and who appear to be owned by substantially the same people as well) have rapidly sold the vast majority of their large store of gold bullion that they had held in The Perth Mint (that bullion being one of their two largest assets, the other being their 49% share of the EKJV), then very quickly pre-paid tax on the capital gains from those gold sales - to generate franking credits, then paid all of that profit out as special fully franked (FF) dividends.  The dividends were so large they were equal to half of the entire market capitalisation of each company on the day before the div announcements were made, without taking the franking credits into account.  They then also moved the payment dates forward.  It all seemed very rushed.  

TBR paid a $3.50 FF special dividend and RND paid a $1.25 FF special dividend.

TBR closed at $4.63 yesterday.  RND closed at $2.15.

TBR & RND told us 1 month ago how much gold they have left at The Perth Mint - see here and here.  It's 11,413 ounces, worth just over A$19m at today's gold price, double their A$9.5m book value (which is based on cost price).

TBR & RND have a combined market cap of A$361 million now.  Apart from that $19m of gold bullion, their only major asset is their 49% of the EKJV.  In that light, NST's A$150m offer for that 49% does seem low.  However, due to the situation that the major shareholders of RND and TBR have gotten themselves into with the TOV, it might just get accepted.

I think ordinary retail shareholders in TBR & RND are going to get screwed from here.

Disclosure:  I bought $10K of both companies to secure the special dividends, then sold out completely after satisfying the 45 day rule, which was 2 days before the NST offer was announced.  They've both fallen further since.  Happy to be out!

21-Sep-18:  TBR $3.50 Spec Div Straw #3 (of 3).

This straw contains extra information around that TBR $3.50 Special Dividend straw.  That straw had reached it's 2500 character limit, so I was forced to bump this extra info into a 2nd straw, and now into this 3rd one.

The Australian Government Takeovers Panel on Monday (17-Sep-2018) made a declaration of Unacceptable Circumstances in relation to Tribune Resources - see here.

The Panel is considering what final orders it will make and will publish details in due course.

There are interim orders in place that prohibit Sierra, Trans Global, Rand, Nimby WA, Mr Anthony (Anton) Billis, Lake Grace Exploration, Northwest Capital and Ms Phanatchakorn Wichaikul (Mr Billis' wife) from disposing, transferring or otherwise dealing with their shares in Tribune.  

Some of those shareholdings could be forcibly sold - see here: http://thewest.com.au/business/mining/takeovers-panel-backs-complaint-over-mystery-tribune-resources-interests-ng-b88963241z

I'm not saying that this is the case, but one could get the impression that these huge special dividends declared yesterday for TBR & RND could possibly be an attempt to liquidate the company's main asset (their gold bullion) and distribute that (and the franking credits generated by the tax paid on the capital gain - which they will pay the ATO immediately) to their shareholders, considering that there is now a possibility that some of those shareholders could have their shares forcibly sold.

Of course, there is also a possibility that the Takeovers Panel might seek to stop these dividends from proceeding also.

On Wednesday (19-Sep-2018), TBR closed at $7.  On Thursday (20-Sep), TBR announced the $3.50 fully franked special dividend and closed at $10.50 (up +50%), which is also where they closed tonight (21-Sep-2018).

On Wednesday (19-Sep-2018) RND closed at $2.40.  On Thursday (20-Sep), RND announced their $1.25 special dividend, and closed at $3.80 (up +58.3%).  They rose another +6% today, closing at $4.03.

Disclosure:  I bought ~$10K of RND (at $3.60) and ~$10K of TBR (at $10.00) today in the opening auction.  However, I understand that there is a lot of risk in owning these 2 stocks right now, particularly in assuming that these dividends will go ahead; they might not, and if they don't, the SPs of both companies will fall - a LOT.  Regardless, even if they do go ahead, the share prices of both will fall substantially when they go ex-div.  Buyer BEWARE!

21-Sep-18:  TBR $3.50 Spec Div Straw #2 (of 3).

This straw contains extra information around that TBR $3.50 Special Dividend straw that I just posted.  That straw had reached it's 2500 character limit, so I was forced to bump this info into this 2nd straw, and I will need to create a 3rd one as well.

First of all, before any one piles into TBR - make sure you read and understand the following, and do plenty of due dilligence.  This is no ordinary company.

Tribune Resources (TBR) has a smaller sibling, Rand Mining (RND), and they are both run by the same small team - and have identical boards - and they have cross-shareholdings in each other (similar to the BKW/SOL setup).  RND own 26.3% of TBR, and TBR own 63% of RND.

They are both junior partners in the EKJV (East Kundana Joint Venture) which was originally split 51% Barrick Gold, and 49% TBR + RND (from memory TBR owned 3 times what RND did, so the split was like 12.25% RND, 36.75% TBR, 51% Barrick) and Barrick operated the mine.

Tribune and Rand have historically taken their share of production mostly as gold bullion and stored most of it in The Perth Mint and recorded that stored gold on their balance sheets at cost.  For that reason, many believed that the actual profits and profitability of both RND & TBR was grossly understated by the headline numbers in their reports.  They sold enough gold to pay their bills (including their directors' fees and their share of the ore processing and other JV costs) but never seemed to have much left over.  They have only recently started paying dividends - in the past year and a bit.

Barrick's 51% ownership stake in the Kundana operations was acquired by Northern Star Resources Limited (ASX: NST) through the acquisition of Gilt-Edged Mining, a wholly owned subsidiary of Barrick Gold, on 1 March 2014, and Northern Star have been the operators since that time.  For NST's website's description of the EKJV, see here.

They also produced a video for Sandvik (whose trucks and mining equipment NST use at Kundana) and you can view that video here.   You'll see in that video that NST do their own mining at Kundana and think like mining contractors, benchmarking themselves against the best Australian mining contractors out there.  It's an interesting video.

A TBR shareholder has initiated court action to try to force TBR to disclose who its major shareholders are, and the Takeovers Panel has become involved too - see here.

Continued in straw #3.

20-Sep-18:  Below are excerpts from TBR's massive special dividend announcement.  For the full announcements, see here. & here & here.

Special dividend of $3.50 per share delivers value to all shareholders

• Funded through the well-timed sale of Tribune’s accumulated gold bullion holdings
• Unlocks clear value for all Tribune shareholders
• Leaves Tribune well-funded to continue its profitable mining and exploration operations
• Provides valuation clarity for investors with clear focus on Tribune’s participation in the East Kundana Joint Venture (EKJV) with Northern Star Resources (ASX: NST) and Rand Mining Ltd (ASX: RND)

The board of independent directors, excluding MD and substantial shareholder Anton Billis, has resolved to pay a dividend of $3.50 per share, fully franked, on 10 October 2018 (ex-div-date: 25-Sep-18).

TBR Independent Non-Executive Director Gordon Sklenka said: "The board’s decision to declare this special dividend comes after more than six months of discussion and deliberations and has factored in feedback from Tribune shareholders...

“We believe the time is right to share with all shareholders the tremendous value of gold bullion built up by the Company through its participation in the EKJV.

“To that end, we have organised for the Company to sell the gold that it has stored at The Perth Mint at prevailing market prices and pre-pay the due tax to make available a fully franked distribution to all shareholders.

“Tribune shareholders have long been asking for more clarity around Tribune’s accumulated bullion holdings, and today’s announcement is an emphatic response that will benefit all shareholders and deliver transparent value.

“Following the payment of this special dividend, Tribune will remain well funded to pursue its mining and exploration activities, including at EKJV."

As at 31 December 2017, Tribune held approximately $132 million in gold inventories at a value reflecting the cost of production.

Tribune’s gold inventory has increased over the past 6 months and allowed the Company to sell ~ $250 million of gold, realising a significant gain on the balance sheet holding value.

Notwithstanding tax payments due on the realised gain in value of the bullion, Tribune is able to declare a $3.50 per share fully franked special dividend worth an aggregate $175 million without jeopardising the company’s strong balance sheet.

Mr Sklenka commented further:  “This special dividend declaration has been a long time in the making.”

25-Sep-2018:  Just a brief warning that both TBR and RND go ex-dividend today (Wednesday 25th September 2018) for their respective special dividends.  While the share price falls could well be massive, there is good reason for that, because those who buy today don't get those very large special dividends.

In Tribune's case, their special dividend is $3.50 per share fully franked, and they haven't fallen yet due to lack of buyers.  There's only 1 buyer for 2,000 shares at this point in time, and at a share price of only $5, being half of yesterday's $10 close.  

In Rand's case their special dividend is $1.25 per share fully franked, and they have fallen exactly $1.25 so far, from $4.50 to $3.25/share, but the highest bid is currently down at $2.15, and the lowest offer is at $3.10, so there is once again a big liquidity issue which is stopping both companies from finding their natural share price levels. 

Both are going lower from here in the short term, so please be aware of that if you were considering buying either of them.   It is unclear how much gold these two have left in The Perth Mint, if any, so these two special dividends have to be viewed as one-offs.  It would be dangerous to expect either company to do this again in the future.  And any chance to qualify for those special dividends has now passed, as both companies went ex-div today.

We also have the Taleovers Panel still considering what orders they will impose in respect of their recent declaration of Unacceptable Circumstances in relation to Tribune (TBR) and their alleged lack of full disclosure relating to their substantial shareholders (one of which is Rand). I know that in the past, such as when GEM were trying to takeover Affinity Education, the Panel ordered that some shares be forcibly sold.  That could prove to be problematic for those shareholders in this environment where there are very few current natural buyers for those shares (except other related parties who would not be permitted to purchase them).   I do currently hold TBR and RND shares, and I'm watching this with interest.

16-Feb-19:  I do not hold.

The West Australian newspaper had an article on NST's opportunistic bid for the 49% of the EKJV that TBR and RND own on November 14th 2018 - see here.

It could take a minute to load, and you might have to scroll down one page once it does.  The following are some of the interesting things included in the article:

1. A broker, who was not named, was quoted as saying that gaining 100% control of East Kundana could be worth $200m to $250m to NST.
2. Apparently, Billis wanted $300m+ for TBR & RND's 49% of the EKJV back when NST bought their 51% from Barrick Gold in 2002.  NST are now offering half that - $150m.

Disclosure:  I own shares in NST, but not in RND or TBR any more.

Additional:  Anton Billis (a.k.a. RND & TBR) has rejected NST's offer.  For now, NST continue to own 51% of the EKJV and the other two (RND + TBR) together own the remaining 49%.  NST remain the operators at East Kundana.

Evolution Mining (ASX:EVN) has acquired 11.05 million shares, representing a 19.9% shareholding, in Tribune Resources (ASX:TBR) for a cash consideration of A$41.3 million - see here.

These shares were purchased by EVN from the Commonwealth of Australia (see here) subsequent to the Takeovers Panel final orders made after their finding of unacceptable circumstances regarding TBR and RND not properly disclosing who their major shareholders were (who ultimately controlled the major shareholdings in TBR and RND).  Millions of shares were ordered to be sold, and those shares were transferred to and held by the Commonwealth Government during the sale process.  It looks like EVN have picked up a large swag of those at just under $3.74 each.

Tribune’s major asset is the Company’s interest in the East Kundana mining operation which is a joint venture between Northern Star Resources Limited (ASX:NST) (51% and operator), Rand Mining (ASX:RND) (12.25%) and Tribune (36.75%). The East Kundana Joint Venture (EKJV) tenements are adjacent to Evolution’s 1.7 million tonnes per annum Mungari processing plant, which is located approximately 20km west of Kalgoorlie in Western Australia.

As at 30 June 2018 the EKJV tenements (100% basis) hosted a Mineral Resource of 10.54Mt grading 6.1g/t for 2.06Moz Au and Ore Reserves of 6.15Mt grading 6.3g/t for 1.24Moz Au1.

Tribune also has a 44.2% shareholding in Rand Mining Limited.

This is an interesting development - since EVN now own a good chunk of the companies (TBR & RND) that are partners of/with EVN's rival NST in the EKJV.