More documents about Macquarie Bank’s role at the Beaconsfield Gold
Mine have reached the Crikey bunker, so today we can explain the
circumstances in which creditors voted to give the financial powerhouse the right
to recover a $54 million loan they never lent – for just $300,000.

Click here to see an extract from the March 2002 creditors report to
mine operator and controlling shareholder Allstate Exploration (in administration) as these capture some of the
crucial action from the meeting which voted to give the Millionaire
Factory their bonanza.

Dale Elphinstone of William Adams asked the following question at the meeting: What is
Macquarie Bank’s view to going forward if this proposal is not approved?

The minutes record Macquarie Bank executive Warrick Morris as follows:

To date MBL have been very supportive of the mine. For
example they are currently contributing towards capital development of
the mine. Mr Morris outlined that the Bank had other options if the
proposal is not approved. Firstly, MBL can sell the property and then
liquidate the companies. Secondly, MBL may not continue with capital
development and mine and process what ore is currently available and
then let the mine flood. Thirdly, it could carry on as in the current structure.
Mr Morris noted that if the proposal were not accepted, it would be
difficult to commit to the Bank continuing to support the mine over the
next five years.

After hearing that and listening to the advice of administrator Michael Ryan, creditors voted to give Macquarie what was
looking likely to become one of its greatest ever windfalls before last
week’s tragic rockfall.

The Australian’s Michael West has been fighting Macquarie ever
since the paper copped a NSW Supreme Court writ over his coverage of
this story last year. Today West produced this page one story
pointing out that the parents of trapped miner Todd Russell, are one of
the Allstate creditors who have only recovered 83c in the dollar whilst
Macquarie has recovered its original $21 million loan, all outstanding
interest, plus $3.3 million on the $54 million inter-company loan that
it never lent.

It would be interesting to hear from administrator Michael Ryan at
today’s Allstate creditors meeting in Launceston about the cash
reserves he’s currently sitting on. If the mine never reopens,
Macquarie and Ryan will have some extremely sensitive decisions to make
about compensation, creditors, worker entitlements, redundancy pay and
what happens to those cash reserves, given that the Millionaires
Factory is at the front of the queue and is already well in profit,
especially when you consider the hedge book.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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