The empire of mining entrepreneur Michael Kiernan continues to bemuse. The intrigue is furthered given the cornucopia of companies with which Kiernan associates appear to spend more time in administration than US-based airlines.

Kiernan made his reputation at Consolidated Minerals until he departed in acrimonious circumstances in 2005 after institutional shareholders refused to endorse his multimillion grant of options. ConsMin had been a market darling — its share price skyrocketing under Kiernan’s guidance after the former truck driver recapitalised Valiant Consolidated Limited (which was then under administration) and reopened the Woodie Woodie manganese mine. While his tenure at ConsMin was a success, since his departure Kiernan’s Midas touch appears to have disappeared.

Earlier this year, a company called Territory Resources teetered on the brink of insolvency (its shares were suspended from trading on the ASX for several months). In 2007, Kiernan (who was Territory’s chairman) planned to use the company as a vehicle to regain control of ConsMin (Territory was ultimately outbid for ConsMin, which was later bought by Ukrainian-backed Palmary Enterprises). After its failed bid for ConsMin, Territory encountered a few problems of its own. The company staggered under the burden of a substantial debt, flawed hedge book and a range of losses on investments in other small mining companies. Territory was also hit by the iron ore price slumping from more than $US114/tonne to less than $US50/tonne.

Many of Territory’s losses coincidentally related to investments in companies associated with Kiernan. For example, in 2008 Territory wrote off more than $35 million in loans and investments in Monarch Gold. Territory also lost money on stakes in Matilda Minerals (which was partially owned by Kiernan’s Crawley Resources), India Resources (of which Kiernan was vice-chairman) and Olympia Resources (later acquired by Kiernan and chaired by Mal Randall, another associate of Kiernan). In total, Territory lost about $120 million in 2008 and 2009 — the company relisted last week and is currently valued by the market at about $70 million.

The current chairman of Territory is Andrew Simpson, who would probably know Kiernan pretty well, having been on the boards of Consolidated Minerals, Matilda Minerals, Windimurra Vanadium and India Resources with the former ConsMin boss.

As Crikey noted last week Monarch Gold (the company that caused Territory to write off $35 million) was placed in administration in July 2008, soon  after Kiernan had been appointed managing director (he had previously been a director until 2006). In 2009, Monarch was purchased by Kiernan’s Stirling Resources from the administrator. Territory’s 2009 annual report noted that Monarch has repaid $2.9 million to Territory and claimed it would pay the $25.5 million it owed the iron ore miner, less proceeds from the sale of several mining projects.

While Kiernan’s web is confusing, it appears that Territory Resources served as a sort of cashbox for companies associated with Kiernan (specifically Monarch Gold but also India Resources) before almost imploding. Territory was only saved by the generosity of the Noble Group, Kiernan’s long-time backers from the Consolidated Minerals days, which agreed to purchase Territory’s $17.6 million in loans last month.

Another common thread in Kiernan’s follies appears to be an accountant,  Brian Hughes. Hughes is the managing director of Pitcher Partners’ Perth office and served as administrator of Monarch Gold, which was sold to Kiernan earlier this year. Hughes also was the administrator of predecessor of Consolidated Minerals (which was sold to Kiernan in 1998) and Croesus Mining (a gold mining company that was chaired by Kiernan before being placed in administration in 2006 and that  sold the Davyhurst gold mine to Monarch, another Kiernan company).