News

September 15, 2008

Kalahari Minerals Escapes The Frying Pan, As Rossing South Tempts In Rio Tinto

By Rob Davies

These days having RAB Capital on your shareholder list gives you as much kudos as saying you work for Lehman Brothers. Until last week 16 per cent of Kalahari Minerals was held by the troubled hedge fund, and Philip Richards held a slug of stock as well. The market is well aware of the liquidity problems that RAB is suffering from and it is known to be an active seller. That can be problem these days, as trading on Aim has been very thin for a long time now, as we pointed out here on Minesite in our recent article on the deficiencies of the Aim market. For many of the smaller companies there are simply no buyers to take the shares that are being offloaded by forced sellers.

This could have been a major problem for Kalahari Minerals, with so much of its equity held by a loose holder. Fortunately, a sharp-eyed broker for Rio Tinto saw the opportunity and bid for 25 million shares, equivalent to 14.9 per cent of the company. It would be nice to think that Rio Tinto, or its large competitors, would be willing to do this for a lot more juniors. Alas that is not the case as the big miners, and Rio Tinto in particular, have always been cautious about buying rivals....