Sons of Gwalia was a

Western Australia Western Australia (commonly abbreviated as WA) is a state of Australia occupying the western percent of the land area of Australia excluding external territories. It is bounded by the Indian Ocean to the north and west, the Southern Ocean to th ...

mining Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic ...

company that mined

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

tantalum Tantalum is a chemical element with the symbol Ta and atomic number 73. Previously known as ''tantalium'', it is named after Tantalus, a villain in Greek mythology. Tantalum is a very hard, ductile, lustrous, blue-gray transition metal that ...

spodumene Spodumene is a pyroxene mineral consisting of lithium aluminium inosilicate, Li Al( Si O3)2, and is a source of lithium. It occurs as colorless to yellowish, purplish, or lilac kunzite (see below), yellowish-green or emerald-green hiddenite, pr ...

lithium Lithium (from el, λίθος, lithos, lit=stone) is a chemical element with the symbol Li and atomic number 3. It is a soft, silvery-white alkali metal. Under standard conditions, it is the least dense metal and the least dense solid ...

and

tin Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal. Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...

. It was Australia's third-largest gold producer and also controlled more than half the world's production of tantalum,Sons of Gwalia's gold hedging had big holes
''

The Sydney Morning Herald ''The Sydney Morning Herald'' (''SMH'') is a daily compact newspaper published in Sydney, New South Wales, Australia, and owned by Nine. Founded in 1831 as the ''Sydney Herald'', the ''Herald'' is the oldest continuously published newspaper ...

'', published: 4 September 2004. Retrieved 4 September 2009 before entering

administration Administration may refer to: Management of organizations * Management, the act of directing people towards accomplishing a goal ** Administrative Assistant, traditionally known as a Secretary, or also known as an administrative officer, admini ...

in August 2004SONS OF GWALIA LIMITED (SGW)
delisted.com.au. Retrieved 5 February 2010 following a financial collapse.

History

First and second incarnations

The original, Sons of Gwalia G. M. Co. was formed in 1897 by George William Hall, major investor William Pritchard Morgan and others to own and operate the Sons of Gwalia mine, which had been discovered in March 1896 by prospectors A. Glendinning, Jack Carlson and Frank White, who had named it after the Welsh homeland of the syndicate funder, Coolgardie storekeeper Thomas Tobias. The mine gave its name to the adjacent town of Gwalia. In May 1897,

Herbert Hoover Herbert Clark Hoover (August 10, 1874 – October 20, 1964) was an American politician who served as the 31st president of the United States from 1929 to 1933 and a member of the Republican Party, holding office during the onset of the Gr ...

, 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. The London and West Australian Exploration Company acquired the Sons of Gwalia property on 17 November 1897, and Bewick Moreing & Co launched Sons of Gwalia, Limited on the London Stock Exchange in January 1898. 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 become 31st

president of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United States ...

(1929–1933). The mine operated continuously until 1963, when it closed and Sons of Gwalia, Limited was liquidated.

Geology

Gold mineralization occurred in the Mine

schist Schist ( ) is a medium-grained metamorphic rock showing pronounced schistosity. This means that the rock is composed of mineral grains easily seen with a low-power hand lens, oriented in such a way that the rock is easily split into thin flakes ...

, which was up to 150 m thick. Lenticular ore 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 a

hanging wall In geology, a fault is a planar fracture or discontinuity in a volume of rock across which there has been significant displacement as a result of rock-mass movements. Large faults within Earth's crust result from the action of plate tectonic ...

basalt Basalt (; ) is an aphanitic (fine-grained) extrusive igneous rock formed from the rapid cooling of low-viscosity lava rich in magnesium and iron (mafic lava) exposed at or very near the surface of a rocky planet or moon. More than 90 ...

and a foot wall of

ultramafic rock Ultramafic rocks (also referred to as ultrabasic rocks, although the terms are not wholly equivalent) are igneous and meta-igneous rocks with a very low silica content (less than 45%), generally >18% MgO, high FeO, low potassium, and are composed ...

Pyrite The mineral pyrite (), or iron pyrite, also known as fool's gold, is an iron sulfide with the chemical formula Fe S2 (iron (II) disulfide). Pyrite is the most abundant sulfide mineral. Pyrite's metallic luster and pale brass-yellow hue giv ...

was the most common of the sulfide minerals in the orebody. The Gwalia lode system was developed down to 1750 m.

Third incarnation

Sons of Gwalia NL was incorporated in August 1981. It issued its initial public prospectus in 1983 to raise $2.5 million on the Perth Stock Exchange (later the Australian Securities Exchange).How sons of Lalor built, then sank, Sons of Gwalia
''

'', published: 22 August 2005. Retrieved 5 February 2010 In 1998, the company closed its Laverton Gold Mine, which it sold to Focus Technologies Limited (later Focus Minerals Limited) for A$2.68 million in July 2002. The company appointed Mark Cutifani, well regarded in the mining industry,Geologist brings 'new eyes' to Sons of Gwalia
''

'', published: 20 January 2004. Retrieved 8 February 2010 as managing director on 13 March 2000.Managing Director Appointment
SGW ASX announcement, published: 13 March 2000. Retrieved 8 February 2010 On 4 September 2000, a flight to the Gwalia mine with seven SGW employees failed to land, instead continuing on to

Burketown Burketown is an isolated outback town and coastal locality in the Shire of Burke, Queensland, Australia. In the , the locality of Burketown had a population of 238 people. It is located west of Cairns and west of Normanton on the Albert R ...

, where it eventually crashed, having run out of fuel. The pilot and the plane's seven passengers were killed.Media Release re: Aircraft Accident
SGW ASX announcement, published: 5 September 2000. Retrieved 8 February 2010 In February 2001, the company announced it had consolidated its

Southern Cross Crux () is a constellation of the southern sky that is centred on four bright stars in a cross-shaped asterism commonly known as the Southern Cross. It lies on the southern end of the Milky Way's visible band. The name ''Crux'' is Latin for ...

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.Rationalisation of Southern Cross Region of WA
SGW ASX announcement, published: 23 August 2001. Retrieved 8 February 2010 On 23 August 2001, SGW made a takeover offer for Pacmin Mining, owner of the

Carosue Dam Gold Mine The Carosue Dam Gold Mine is a gold mine located south of Laverton, Western Australia. Carosue Dam was previously owned by the now defunct mining company Sons of Gwalia Limited. Purchased in 2005, the mine was placed into care and maintenance ...

and the Tarmoola Gold Mine, valued at A$159 million. At the close of offer on 16 October 2001, SGW held 98.9% of all Pacmin shares and proceeded to compulsory acquisition.Close of offer for PML/proceeding to compulsory acquisition
SGW ASX announcement, published: 16 October 2001. Retrieved 8 February 2010 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. In early 2003, the company started to show signs of being troubled. It had to deny reports by

UBS Warburg UBS Group AG is a multinational Investment banking, investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres ...

on 13 February 2003, that one of its investment bankers had withdrawn support. The following day, managing director Mark Cutifani, in a surprise move, resigned from his position.Director Resignation
SGW ASX announcement, published: 14 February 2003. Retrieved 8 February 2010 In July 2003, the company announced the results of a restructuring, aimed at improving the performance of SGW. In October that year, the company successfully raised A$63 million by issuing new shares.Capital Raising
SGW ASX announcement, published: 15 October 2003. Retrieved 8 February 2010 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.Appt of MD/Non Exec Chairman&Changes to Board of Directors
SGW ASX announcement, published: 19 January 2004. Retrieved 8 February 2010

Administration

The company entered

in August 2004 following a financial collapse, with debts exceeding $800 million after suffering from falling gold reserves and hedging losses. Sons of Gwalia was Australia's third-largest gold producer and also controlled more than half the world's production of tantalum. In March 2005, the company sold its gold mining operations, consisting of the

Marvel Loch Gold Mine The Marvel Loch Gold Mine is a gold mine located at Marvel Loch, south of Southern Cross, Western Australia. It is operated by St Barbara Limited. Apart from Marvel Loch, St Barbara also operated the Gwalia Gold Mine at Leonora and owned th ...

, the

Gwalia Gold Mine The Gwalia Gold Mine is located at Gwalia, a few kilometres south of Leonora, Western Australia. It was originally established by Welsh miners in the late 19th century and Herbert Hoover, the later President of the United States, served as th ...

, the

and the Tarmoola Gold Mine, to St Barbara Mining Limited for A$38 Million. Talison Minerals paid $205 million to buy the Wodgina and Greenbushes tantalum business of Sons of Gwalia but temporarily closed Wodgina because of falling tantalum prices. The mine re-opened, but closed again after less than a year. 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. On 29 August 2006, Sons of Gwalia (SGW) was de-listed from the Australian Securities Exchange. On 4 September 2009, the former auditors of Sons of Gwalia,

Ernst & Young Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership headquartered in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and Pricewat ...

, agreed to a $125 million settlement over their role in the gold miner's collapse.

Ferrier Hodgson Ferrier Hodgson was a firm specialising in corporate recovery, corporate advisory, forensic accounting and forensic IT. The firm has a specialist management consulting arm called Azurium. Ferrier Hodgson was established in 1976. It became on ...

, 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. 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.

Production

Annual production figures of the company:

Gold

Tantalum

Timeline

* 5 May 1983: Listed on the Perth Stock Exchange. * 30 July 1992: Changed name from Sons of Gwalia NL to Sons of Gwalia Limited. * 13 March 2000: Mark Cutifani appointed as managing director. * 4 September 2000: A flight from Perth to the Gwalia mine fails to land and continues on to North Queensland, where it crashes without survivors. * 23 August 2001: SGW makes takeover offer for Pacmin Mining, valued at A$159 million. * 16 October 2001: Compulsory acquisition of Pacmin announced, at a cost of A$210 million. * 14 February 2003: Managing director Mark Cutifani resigned from his position. * 15 October 2003: The company successfully raised A$63 million by issuing new shares. * December 2003: Gwalia Gold Mine closed and placed in care and maintenance.Chairman's Summary Half Year Ended 31 December 2003
SGW ASX announcement, published: 18 February 2004. Retrieved 8 February 2010 * 19 January 2004: John Leevers appointed as managing director. Peter and Chris Lalor to retire from company. * 30 August 2004:

Administrators Administrator or admin may refer to: Job roles Computing and internet * Database administrator, a person who is responsible for the environmental aspects of a database * Forum administrator, one who oversees discussions on an Internet forum * ...

appointed for the company. * 17 September 2004: Class action filed against company as well as directors, auditors and officers of company by shareholders. * 28 January 2005: Five directors, including the chairman, and the company secretary resign. * 15 March 2005: Managing director John Leevers resigns. * 21 March 2005: Gold operations sold to St Barbara for A$38 million. * 15 September 2005: Shareholders awarded equal status to creditors in court. * 29 August 2006: Company delisted from the ASX after failing to pay its annual listing fee.

References

External links

Ferrier Hodgson website – Sons of Gwalia announcements
{{Authority control Defunct mining companies of Australia Companies formerly listed on the Australian Securities Exchange Gold mining companies of Australia Companies disestablished in 2006 Companies established in 1981 1981 establishments in Australia 2006 disestablishments in Australia