Two Australian billionaires mix mining with medicines

Gold mining stock Red 5 turns to gold for TPG’s David Teoh

John Stensholt

The Australian

23 September 2019

David Teoh is best known for building the TPG Telecom business from
scratch, but the ­reclusive billionaire also holds one of the hottest
mining stocks on the ASX in his portfolio.

The notoriously private TPG chairman and his wife Vicky ­jointly hold
about 35 per cent of TPG shares, worth about $2.05bn combined.

They also have shares in at least half a dozen ASX-listed companies, led
by the surging goldminer Red 5.

Red 5 is one of the best performing small caps on the market this year,
having risen by about 240 per cent in value since January 1 to give it
market capitalisation of about $380m. It operates the Darlot and King of
the Hills goldmines in the Eastern Goldfields region of Western Australia,
where it has ramped up production in the past two years.

Secrets of success: Building TPG into a telco giant from scratch; buying
Sydney property

The company has said it’s had positive drilling results in WA in recent
months, and has about $25m in cash and bullion on its books against only
about $10m debt. It has also entered into a $20m working capital facility
with Macquarie Bank.

Red 5 is by far the best performing stock in the Teoh family portfolio,
though TPG shares are up about 9 per cent since January 1.

Teoh is one of the country’s more reclusive billionaires, though he has
long been one of the better deal-makers among the wealthy, though his
attempted $15bn merger of equals between his TPG and Vodafone Australia is
subject to court action.

That matter recently had Teoh making some difficult public ­appearances in
the Federal Court in Melbourne in an attempt to convince judge John
Middleton that the Australian Competition & Consumer Commission had erred
in opposing the deal.

Teoh moved his family from Malaysia to Australia in 1986, beginning his
business career with Total Peripherals Group. It sold custom-built
computers to government departments and later became an internet services
provider. It has since made a string of purchases, including SP
Tele­media, AAPT, iiNet and PIPE Networks as Teoh has relentlessly built
one of the county’s biggest telcos.

He and Vicky hold their wealth mostly in TPG shares — where they are
joined on the register by other members of The List, Australia’s Richest
250, in Robert Millner of Washington H Soul Pattinson fame and WIN
Corporation owner Bruce Gordon, though the Teoh family also owns
commercial property assets.

The family paid $53m for 529 Kent Street in the Sydney CBD last year, a
building that houses the flagship restaurant of celebrity chef Wakuda
Tetsuya, Tetsuya’s. Teoh’s family also owns the site adjoining it, 320-334
Sussex Street, which they bought for $4.8m in 2011. The building is used
for commercial purposes.

There is also a considerable portfolio of industrial land holdings in
Chatswood, in Sydney’s northern suburbs. Otherwise there are several other
listed mining plays, including base metals explorer AIC Mines.

Its shares have increased in value by 51 per cent since January, though
they are still only at about half the levels they were trading at 12
months ago. AIC’s Marymia project has both copper and gold prospects, as
does the Lamil project it has agreed to pay the listed Rumble Resources
about $10m in cash and shares over the next five years in exchange for a
65 per cent stake.

Vicky Teoh also is listed among the top 20 shareholders in another gold
miner, Millennium Minerals. It has the Nullagine Gold Project in the East
Pilbara region of WA, but its shares have fallen 53 per cent since the
beginning of 2019.

Then there is Vita Life Sciences, which sells over-the-counter
pharmaceuticals, pills and other health products in Australia, and across
Southeast and East Asia. Vicky Teoh became a shareholder in 2016, but Vita
Life shares are down about 30 per cent since January 1.

The other main stock in the Teoh portfolio is more focused on their own
industry, Macquarie Telecom Group.