| Type | Public |
|---|---|
| Industry | Resources |
| Fate | Administration |
| Founder(s) | Peter & Chris Lalor |
| Headquarters | Perth, Australia |
| Key people | John Leevers - MD/CEO Peter Lalor - Chairman Chris Lalor - Executive director |
| Products | Gold, Tantalum |
| Production output | Tantalum: 2,290,000 lb (1,040,000 kg) Gold: 521,081 ozt (16,207.4 kg) |
Sons of Gwalia was a Western Australian mining company which mined gold, tantalum, spodumene, lithium and tin.
Sons of Gwalia was Australia's third-largest gold producer and also controlled more than half the world's production of tantalum,[1] before entering administration in August 2004 [2] following a financial collapse.
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The original "Sons of Gwalia" was a gold mine established in the late 19th century, and which gave its name to the nearby town of Gwalia. The original mine is notable in that it was founded and managed by Herbert Hoover (later to become the President of the United States). That mine closed down in 1963.
The current Sons of Gwalia began operations in 1981.[3]
In 1998, the company closed its Laverton Gold Mine, which it sold to Focus Technologies Limited for A$2.68 million in July 2002.[4]
The company appointed Mark Cutifani, well regarded in the mining industry,[5] as managing director on 13 March 2000.[6]
On 4 September 2000, a flight to the Gwalia mine with seven SGW employees failed to land, instead continuing on to Burketown, where it eventually crashed, having run out of fuel. The pilot and the plane's seven passengers were killed.[7]
In February 2001, the company announced it had consolidated its Southern Cross operations, acquiring the remaining 30% of the Yilgarn 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.[8]
On 23 August 2001, SGW made a takeover offer for Pacmin Mining, owner of the Carosue Dam Gold Mine and the Tarmoola Gold Mine, valued at A$159 million.[9] At the close of offer on 16 October 2001, SGW held 98.9% of all Pacmin shares and proceeded to compulsory acquisition.[10] In retrospect, the purchase of Pacmin and Tarmoola was seen as very expensive, especially in the light of gold reserve write downs and operational difficulties at the Tarmoola mine.[11][12]
In early 2003, the company started to show signs of being troubled. It had to deny reports by UBS Warburg on 13 February 2003, that one of its investment bankers had withdrawn support.[13] The following day, managing director Mark Cutifani, in a surprise move,[5] resigned from his position.[14] In July 2003, the company announced the results of a restructering, aimed at improving the performance of SGW.[15] In October that year, the company successfully raised A$63 million by issuing new shares.[16]
Almost a year after the resignation of Mark Cutifani, John Leevers was appointed as 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 instead appointed as managing director and CEO.[17]
The company entered administration in August 2004 [2] following a financial collapse,[3] with debts exceeding $800 million after suffering from falling gold reserves and hedging losses.[18] 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 the Marvel Loch Gold Mine, the Gwalia Gold Mine, the Carosue Dam Gold Mine and the Tarmoola Gold Mine, to St Barbara Mining Limited for A$38 Million.[19][20] Talison Minerals paid $205 million to buy the Wodgina and Greenbushes tantalum business of Sons of Gwalia but has since temporarily closed Wodgina because of falling tantalum prices.[18]
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.[21] On 29 August 2006, Sons of Gwalia (SGW) was delisted from the Australian Securities Exchange.[22]
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.[18]
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.[18]
Annual production figures of the company:
| Year | Production | Grade | Cost |
| 1997-98 [23] | 517,978 ozt (16,110.9 kg) | ||
| 1998-99 | |||
| 1999-2000 [24] | 413,184 ozt (12,851.5 kg) | A$337/ozt (A$10.8/g) | |
| 2000-01 [25] | 438,166 ozt (13,628.5 kg) | ||
| 2001-02 [26] | 541,224 ozt (16,833.9 kg) | ||
| 2002-03[27] | 577,702 ozt (17,968.5 kg) | A$454/ozt (A$14.6/g) | |
| 2003-04 [28] | 521,081 ozt (16,207.4 kg) | A$438/ozt (A$14.1/g) | |
| 2004-05 |
| Year | Production |
| 1997-98 [23] | 877,281 lb (397,928 kg) |
| 1998-99 | |
| 1999-2000 [29] | 1,111,967 lb (504,380 kg) |
| 2000-01 [30] | 1,625,364 lb (737,253 kg) |
| 2001-02 [26] | 2,138,841 lb (970,162 kg) |
| 2002-03[27] | 2,193,792 lb (995,087 kg) |
| 2003-04 [28] | 2,290,000 lb (1,040,000 kg) |
| 2004-05 |
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