Sand mining isn't habitually associated with corporate intrigue but Ticor has a tale to rival that of any Rupert Murdoch imbroglio. It's quite an achievement for a company whose humble role in life is to extract and process mineral sands. It does this through its two main investments: a 50% stake in the Tiwest mine at Cooljarloo in Western Australia and a 40% stake in a mineral sands operation in South Africa's Natal Region. It also owns a sodium cyanide plant at Gladstone, Queensland. All thrilling stuff.

Now for the racy bit. We normally wouldn't bore you with a deconstruction of the corporate veil but we think in this case it's warranted. As part of an historical legacy, Kumba Resources of South Africa had a holding of Ticor shares. Not happy to sit in a minority position, it has built a controlling 51% stake over the past few years. But Kumba itself has also been a takeover target. In early 2002, Anglo American started building a stake in the company-it now owns 66%. For those not aware, Anglo is the world's third-largest diversified resources company after BHP Billiton and Rio Tinto, with a market capitalisation of around US$30bn. Added to the mix is the fact that Ticor and Anglo are no strangers-Anglo has more than a passing familiarity with Ticor's business. In other words, the possibility of a takeover at some stage isn't out of the question. Now, that's not reason enough to buy shares but it shouldn't be ignored either.

Let's now look at the financials. Although the company reported a loss of $4.8m for the 2003 financial year, down from a $22.9m profit in 2002, that is something of an unfair view of reality. The difference was largely due to a negative $20m effect of currency movements between the rand, the Aussie dollar and the US dollar. It has more to do with the effect of translating US$ numbers for reporting purposes than tangible losses. Then there was a writedown in the book value of the sodium cyanide operations, to $25m. Several attempts have been made to sell this plant over the last few years and one suspects they may have trouble giving it away. We'll see.

But the main game for Ticor is the future progress of its fledgling South African operations, which are set to hit their straps in 2005. Although running a mining operation in South Africa is no sure bet, we think the potential rewards more than offset the risks in this case. Bigger fish seem to think likewise. The shares are down 20% since issue 119/Jan 03 (Hold for the Upside-$1.69) and existing holders should still HOLD FOR THE UPSIDE .