 | |
| Company type | Public |
|---|---|
| Industry | Mining |
| Founded | 28 August 1981 |
| Founder | Peter & Chris Lalor |
| Defunct | 2006 |
| Fate | Administration |
| Headquarters | , |
Key people | John Leevers –MD/CEO Peter Lalor –Chairman Chris Lalor –Executive director |
| Products | Gold, tantalum |
Production output | Tantalum: 2.29 million lb (1.04 million kg) Gold: 521,081 ozt (16,207.4 kg) |
Sons of Gwalia was aWestern Australianmining company that minedgold,tantalum,spodumene,lithium andtin. It was Australia's third-largest gold producer and controlled more than half the world's production of tantalum,[1] before enteringadministration in August 2004[2] following a financial collapse.
The original,Sons of Gwalia G. M. Co. was formed in 1897 by George William Hall, major investorWilliam Pritchard Morgan and others to own and operate theSons of Gwalia mine, which had been discovered in March 1896 by prospectors A. Glendinning, Jack Carlson and Frank White, who had named it afterthe Welsh homeland of the syndicate funder, Coolgardie storekeeper Thomas Tobias. The mine gave its name to the adjacent town ofGwalia.[3]
In May 1897,Herbert Hoover, manager and inspecting engineer of the London and Western Australian Exploration Company, an associate of the British management firm Bewick, Moreing & Co., inspected the Sons of Gwalia operation and recommended the acquisition of the mine.[4][5][6]
The London and West Australian Exploration Company acquired the Sons of Gwalia property on 17 November 1897, and Bewick Moreing & Co launchedSons of Gwalia, Limited on the London Stock Exchange in January 1898.[4]Hoover was appointed superintendent of the Sons of Gwalia Mine and managed it from May to November 1898 before moving on to China. He was later to become31stpresident of the United States (1929–1933).[4]
The mine operated continuously until 1963, when it closed and Sons of Gwalia, Limited was liquidated.[4]
Goldmineralization occurred in the mineschist, which was up to 150 metres thick.Lenticularore bodies occurred in this schist, with the eastern limb called the Main Lode dipping 45 degrees to the east, and the western limb called the West Lode dipping 38 degrees to the east, since the surface expression was horseshoe shaped plunging to the south at a 70-degree angle. The Mine schist is bracketed by ahanging wall ofbasalt and afoot wall ofultramafic rock.Pyrite was the most common of thesulfide minerals in the ore body. The Gwalia lode system was developed down to 1750 m.[7]
Sons of Gwalia NL was incorporated in August 1981. It issued its initial public prospectus in 1983 to raise $2.5 million on thePerth Stock Exchange (later theAustralian Securities Exchange).[8]
In 1998, the company closed itsLaverton Gold Mine, which it sold to Focus Technologies Limited (later Focus Minerals Limited) forA$2.68 million in July 2002.[9]
The company appointedMark Cutifani, well regarded in the mining industry,[10] as managing director on 13 March 2000.[11]
On 4 September 2000,a flight to the Gwalia mine with seven SGW employees failed to land, instead continuing on toBurketown, where it eventually crashed, having run out of fuel. The pilot and the plane's seven passengers were killed.[12]
In February 2001, the company announced it had consolidated itsSouthern Cross operations, acquiring the remaining 30% of theYilgarn Star Gold Mine it didn't own and merging the operation with Marvel Loch, closing the Yilgarn Star mill. It also acquired other interests in the region in this transaction.[13]
On 23 August 2001, SGW made a takeover offer forPacmin Mining, owner of theCarosue Dam Gold Mine and theTarmoola Gold Mine, valued at A$159 million.[14] At the close of offer on 16 October 2001, SGW held 98.9% of all Pacmin shares and proceeded to compulsory acquisition.[15] In retrospect, the purchase of Pacmin and Tarmoola was seen as very expensive, especially in the light of gold reserve writedowns and operational difficulties at the Tarmoola mine.[16][17]
In early 2003, the company started to show signs of being troubled. It had to deny reports byUBS Warburg on 13 February 2003, that one of its investment bankers had withdrawn support.[18] The following day, managing director Mark Cutifani, in a surprise move,[10] resigned from his position.[19] In July 2003, the company announced the results of a restructuring, aimed at improving the performance of SGW.[20] In October that year, the company successfully raised A$63 million by issuing new shares.[21]
Almost a year after the resignation of Mark Cutifani, John Leevers was appointed managing director of the company from 27 January 2004. In April 2004, the company's chairman Peter Lalor and his brother Chris, an executive director, having founded the company 22 years earlier, resigned from their positions on the board. John Leevers was appointed managing director and CEO.[22]
The company enteredadministration in August 2004[2] following a financial collapse,[8] with debts exceeding $800 million after suffering from falling gold reserves and hedging losses.[23] Sons of Gwalia was Australia's third-largest gold producer and also controlled more than half the world's production of tantalum.[1]
In March 2005, the company sold its gold mining operations, consisting of theMarvel Loch Gold Mine, theGwalia Gold Mine, theCarosue Dam Gold Mine and theTarmoola Gold Mine, toSt Barbara Mining Limited for A$38 million.[24][25]Talison Minerals paid $205 million to buy theWodgina andGreenbushes tantalum business of Sons of Gwalia but temporarily closed Wodgina because of falling tantalum prices.[26] The mine re-opened, but closed again after less than a year.[27]
In a landmark decision, the shareholders of Sons of Gwalia were awarded the same status as non-shareholding creditors on 27 February 2006 because the company breached continuous disclosure obligations or misled them about its financial status.[28] On 29 August 2006, Sons of Gwalia (SGW) was de-listed from theAustralian Securities Exchange.[29]
On 4 September 2009, the former auditors of Sons of Gwalia,Ernst & Young, agreed to a $125 million settlement over their role in the gold miner's collapse.Ferrier Hodgson, the company's administrator, had claimed Ernst & Young was negligent over the accounting of gold and dollar hedging contracts. It is hoped the $178 million of assets will assist in bringing the long-running administration to a close in December 2009.[30]
In addition to the $125 million from E & Y, SoG's former directors the Lalor brothers, agreed to a $53 million settlement over their role in the company's collapse.[31]
Annual production figures of the company:
| Year | Production | Grade | Cost |
| 1997–98[32] | 517,978 ozt (16,110.9 kg) | ||
| 1998–99 | |||
| 1999–2000[33] | 413,184 ozt (12,851.5 kg) | A$337/ozt (A$10.8/g) | |
| 2000–01[34] | 438,166 ozt (13,628.5 kg) | ||
| 2001–02[35] | 541,224 ozt (16,833.9 kg) | ||
| 2002–03[36] | 577,702 ozt (17,968.5 kg) | A$454/ozt (A$14.6/g) | |
| 2003–04[37] | 521,081 ozt (16,207.4 kg) | A$438/ozt (A$14.1/g) | |
| 2004–05 |
| Year | Production |
| 1997–98[32] | 877,281 lb (397,928 kg) |
| 1998–99 | |
| 1999–2000[38] | 1,111,967 lb (504,380 kg) |
| 2000–01[39] | 1,625,364 lb (737,253 kg) |
| 2001–02[35] | 2,138,841 lb (970,162 kg) |
| 2002–03[36] | 2,193,792 lb (995,087 kg) |
| 2003–04[37] | 2.29 million lb (1.04 million kg) |
| 2004–05 |
Worldwide softening tantalum demand and delays in receiving Governmental approval for installation of necessary crushing equipment are among contributing factors in this decision
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| National | |
