Selective sale of mining shares

A New Zealand mineral explorer, King Solomon Mines, plans a private placement to raise $600,000 next week ahead of a A$10 million ($11 million) IPO in Australia in July.

The placement will not be open to the public and only a select few "high net worth individuals" have been approached.

King Solomon's main assets are in Chinese-controlled Inner Mongolia.

The company is 18 per cent owned by Stephen McPhail, a former executive with Todd Energy's exploration arm, and 15 per cent by Bruce Bell, who was an executive director in Australian-listed mining companies Sigma and Delta.

Bell and McPhail had a company called High Lake Resources which they listed in Australia in the 1990s and it was taken over by Ballarat Goldfields in 1998. Ballarat has a market capitalisation of A$540 million.

King Solomon's main shareholder, with 28 per cent, is Mongolian national La Fu. New Zealand listed company Widespread Portfolio has a 10 per cent stake.

Next week's placement will increase the company's capital by 16 per cent. The shares are being issued at $1.80 each.

McPhail said their interest in Mongolia was sparked six years ago when they were approached by La Fu in Australia to look at his gold mine - "a primitive operation" - and quickly realised that the real potential was elsewhere.

The company now has two other gold prospects plus nickel and copper projects.

- NZPA