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GOLD COAST, Australia (Reuters) - With a cry of "cheap as old boots" from the auctioneer, the hammer came down at A$5,000 ($5,200) on the first broodmare to open a three-day auction of 350 horses from the stables of faltering mining magnate Nathan Tinkler.
Tinkler's rise from pit electrician to Australia's youngest billionaire has hit a hurdle, with creditors circling his stable of mining, sports and racing businesses, and he is raising funds with the out-of-season sale that began on Tuesday.
His 19.4 percent stake in Australia's biggest independent coal miner Whitehaven Coal, which represents the bulk of his wealth, is heavily leveraged and has shrunk considerably in line with falling coal prices.
A fiery annual general meeting looms as the next hurdle on Thursday, with Tinkler demanding a clear earnings forecast from Whitehaven and threatening to use his voting power to overthrow the chairman and senior board members if they don't comply.
Tinkler, 36, fulfilled his dream of owning a racing stable, joining a business known as "the sport of kings" and its wealthy elite, after he turned a A$1 million bet on an unfancied coal deposit into a billion-dollar fortune.
However his Whitehaven stake, worth about $1.2 billion at its peak, has shrunk to below A$700 million. Sources have told Reuters Tinkler is dealing with a number of lawsuits over missed payments.
But Tuesday started with a good omen -- the first horse on the block was named "A Good Day". Many punters at the blood stock auction company Magic Millions said prices at Tinkler's "unreserved reduction sale" were higher than anticipated.
"I couldn't be happier with the way the market is and the way it has received the stock we are selling," said Magic Millions Managing Director Vin Cox. Buyers were mainly from Australia, with some from the Philippines.
Prices for the 200 mares on sale on Tuesday from Tinkler's Patinack Farm, ranged from A$1,000 to A$240,000, pulling in more than A$2.5 million near the end of the first day.
Brian Nutt, owner of the Attunga Stud, said prices were higher than he anticipated given that Tinkler's "C-grade" stock was on the block, but still well down on what would be expected at the industry's two annual broodmare sales.
"The quality of this sale is certainly not as good," Nutt said, clutching a dog-eared catalogue after deciding not to bid on a mare.
Tinkler's foray into horses has been as eventful as his investment in mining, splashing out more than A$300 million since 2007 to build Patinack Farm, Australia's largest thoroughbred racing and stud operation.
The spending spree included A$19 million on 59 horses at the 2008 Magic Millions annual yearling sale. Tinkler's two stud farms in New South Wales state and a third in neighbouring Queensland are home to more than 1,200 horses.
"I've always been a fan of the horses and stuff and I suppose it's probably got a bit out of hand, but it's good fun and I enjoy it," Tinkler said in a rare TV interview last year.
He celebrated when stallion All Too Hard won the Caulfied Guineas two weeks ago, but other winners have been scarce.
"Most people in the industry believe he has built up too quickly," one bloodstock manager, who asked not to be identified, said at Tuesday's sale.
Australian media have also reported that Tinkler tried to offload his entire racing business at a loss to a Qatari sheikh.
"It's not a good time to sell mares," said Peter Ford, the manager of Peter Ford Thoroughbreds, who was almost drowned out by the rapid-fire patter of the auctioneer. "All of us know this is a sale of the bottom, a lot of serious buyers aren't here."
Patinack Farm representatives have said the timing was right for a reduction of its bloodstock, even though broodmares are usually sold at Easter, rather than the current breeding season.
Nutt, his eye still open for a Patinack bargain, said the racing industry was grateful for Tinkler's splurge.
"He propped up the industry at a difficult time," Nutt said. A lot of breeders have done very well out of him."
($1 = 0.9683 Australian dollars)
Editing by Paul Tait