# LST - Lion Selection



## 56gsa (17 April 2007)

LSG has merged with AUS and they are now Lion Selection Limited (LST)

190.7m shares
6.1m options (ex @ 1.51 April 09)

unaudited NTA is $2.12 @ 16 April

there are some tax issues they are sorting out - but not sure what this means for SH


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## 56gsa (5 June 2007)

*Re: LST - Lion Selection Limited*

qtrly report is worth a read - not least to get an overview of some worthwhile investments LST has made (IRN, HAV, AGM, ALB, PPN etc) - has a fairly good track record, and with cashed in the bank and no PDF structure to limit its investments will be interesting to see what it next puts its money into. 

NTA after tax at end of April is $2.12, and IRN (LST's biggest investment) has gone up 25% since then, and HAV (of which LST owns 19%) has announced a return to SH of its substantial investments in CUY and GHT.

Also interesting is the split of commodities LST holds - I think it is perceived as a gold investor (to some extent tracks the PoG) but by market value its got just as much exposure to copper and nickel.

Currently at 20% discount to after tax NTA makes it worth a look IMO .. DYOR


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## 56gsa (30 August 2007)

*Re: LST - Lion Selection Limited*

... anyone been to africa lately?!

SHAREHOLDER PHOTOGRAPHY COMPETITION – 2007 ANNUAL REPORT
Shareholders are invited to submit photographs of lions for the cover of the 2007 Annual Report. Images can be submitted as high quality photographic prints or computer files (Photoshop TIF file 300dpi or Illustrator EPS file 800dpi). Photos must be taken by the shareholder and will be returned at the close of the competition – 28 September 2007.

The winning entry will be selected by the Lion team and the photographer will receive a framed copy of the report cover and acknowledgment in the Annual Report. Send entries to (with return contact details and details of where photo was taken):

Jane Rose
Lion Selection Limited
Level 4, 15 Queen Street
Melbourne VIC 3000
Ph 9614 8008 Fax 9614 8009
Email: jrose@lsg.com.au


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## prawn_86 (10 September 2007)

Hi all, this co was raised in a thread in the beginners lounge by Mark70920.

All his statements were correct and here is a very brief analysis.

they invest in small cap resource stocks, so is a fair bit of risk there. but their management seem to have experience and their latest quaterly shows what stocks they are holding.

the kicker however is this:
NTA - 215cps ($2.15)
current price - $1.54

the only reason i can think of is that the market is factoring in a fall in the shares they hold. however, for this much of a gap to come true their holdings would need to lose over 25% across the board because they hold $40mill cash and have that gold mine.

i'll do some more research but they are definetly going on my watchlist.

opinions very welcome.


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## Dutchy3 (18 November 2007)

Hi Prawn

This one will be making its move soon and I suspect it could be up .... waiting for a signal.


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## DionM (21 November 2007)

Ignore this post ... I was asking about dividends when I see plainly they have paid them in the past when they were LSG ...


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## prawn_86 (21 November 2007)

> the kicker however is this:
> NTA - 215cps ($2.15)
> *current price - $1.54*




Why do i always put stocks on my watchlist that seem to head up, and buy the ones that go sideways

If only i knew...


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## BlingBling (22 November 2007)

prawn_86 said:


> Why do i always put stocks on my watchlist that seem to head up, and buy the ones that go sideways
> 
> If only i knew...




Sounds like I'm in the same boat as you!
I have no idea why that's the case, but if you find the answer, please let me know!


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## 56gsa (1 March 2008)

This seems to have been harshly dealt with due to collapse of VRE and LAF - together these represented $24m of investment from LST (or 12 cents / share).  The revised NTA of $1.77 after writing off VRE & LAF (and 3c dividend) is still well above current sp of $1.30.  Since Nov07 ASX down 20%, LST NTA down 10% but LST sp down 25% ??

Cracow sale looks to be going ahead with LST planning to exercise its right to purchase the other 70% from NCM.  This is currently producing over 100koz of gold per year (unhedged), which would make LST one of the mid-tier Aussie gold miners.  This is from ABN research:



> In our assessment, the Cracow acquisition would confirm that Lion Selection is on the path to becoming a conventional mining company, with the value of production assets approaching the value of investments. We would expect that the market would move to value LST as such, rather than trading at a discount to NTA.​




At current production/cost rates 100% of Cracow would be about annual EPS of 19.  So at PER of 10, this puts LST at $1.90.  Mine life is an issue - this is from the NCM report:



> The life-of-mine plan is regularly reviewed and, with the inclusion of the Sovereign, the current mine planning inventory is 1.6 million tonnes containing approximately 446,000 ounces of gold. The remaining mine life is approximately five years. However, assessment of other shoots is expected to further extend mine life.​




... but they would still have their investments of approx $170m as well (85 cps) - so even if you discount the PER to 5 on Cracow earnings you get  $0.90 + invests $0.85 = $1.75

Will be watching this to see if they proceed with Cracow purchase and for subsequent re-rating.....


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## 56gsa (1 March 2008)

Forgot to mention they also had this in their quarterly... a bit of a tease perhaps but if LST does get Cracow and is still rating below NTA there's no reason an SBM or other mid-tier wouldn't see this as an opportunity for takeover, cash  out their investments and gain some unhedged Ozs of gold...



> A recent search of Lion’s share registry has indicated a holding of  approximately 5% of which Lion has concerns regarding the beneficial owner and correct disclosure. This has been noted to the ASX and ASIC in early January.​




shareholding is lots of 'nominee' companies - with Mark Creasy having bit over 5%


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## AnDy62 (2 March 2008)

I'm pretty sure LST has been in trouble due to management concerns and exposure to non-performing juniors, view resources etc I believe. Though, the NTA does indeed exceed the price- have a look at the LPT sector, same story. It's simply a reflection of very bearish sentiment. This said Lion, unlike LPTs though can benefit from the likely increases in gold. Maybe a contrarian bet, but personally I'd want to see some sp proof sentiment has changed


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## 56gsa (2 March 2008)

AnDy62 said:


> I'm pretty sure LST has been in trouble due to management concerns and exposure to non-performing juniors, view resources etc I believe. Though, the NTA does indeed exceed the price- have a look at the LPT sector, same story. It's simply a reflection of very bearish sentiment. This said Lion, unlike LPTs though can benefit from the likely increases in gold. Maybe a contrarian bet, but personally I'd want to see some sp proof sentiment has changed




Hi AnDy... agree this needs to be watch - but right time to consider may be if/when they decide to purchase Cracow... because of re-rating as minign company, and takeover prospects

while all stocks are under suspicion, difficult to comapre LST with an LPT :
- obviously  its investing in gold/copper which has a different outlook than property
-  its got no debt - while the companies it invests in may be geared, LST's risk is spread over a number of companies (I think over 10?), and each one is not a major investment (apart from Cracow, largest are IRN $22m and WEX $14m ... total assets $341m).  
-  its got an income stream from Cracow (half of which its paying out as a dividend - just paid 3 cents div)

anyway - there for others to research and consider...


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## AnDy62 (2 March 2008)

Yeah I agree completely. But I was just pointing out that NTA by itself is not a reason to rush in. Definitely one to think about...


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## AnDy62 (4 March 2008)

I've done a bit of research on this share lately and I think it could be a worthwhile investment. Very nearly bought in today but thought the better of it... will wait for evidence of a turn around. Any LST holders here just out of interest?


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## Sean K (4 March 2008)

AnDy62 said:


> Very nearly bought in today but thought the better of it... will wait for evidence of a turn around. Any LST holders here just out of interest?



Not a long term holder but have followed it closely. 

I agree with waiting for a turnaround. The knife could still well be falling, however todays candle looks promising. On low volume however, so not confirming in my mind. Resistance on the way back up as indicated.

IMO, It needs to clear at least 2 of those hurdles before I'd start calling it a change of direction.


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## AnDy62 (19 March 2008)

Buyers stacking up and on brink of breaking resistance, currently $1.35. Candle looks encouraging. Lion might be ready to pounce, ahahah couldn't resist. Anyway, I'm on the sidelines for this one at the moment but might get in soon if the technicals stay good. Happy Days


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## 56gsa (19 March 2008)

well gents.. there it is... TAKEOVER!  by IRN (Lion's largest investment)

at a minimum of 2.5 IRN for every 1 LST (approx 1.65) or up to 2.7 IRN to every LST (1.78) if they get over 90%

This is a steal with LST's NTA at 1.77 - and looks like IRN is keen to seel everything - even Cracow!  Nice cashcow

Will someone else come in and take the bait... ??




> Indophil targeting Lion Selection
> Wednesday March 19, 2008, 7:45 pm
> 
> The former major shareholder of takeover target Allegiance Mining NL has itself become corporate prey for an industry predator.
> ...


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## 56gsa (24 March 2008)

Not surprisingly the LST has rejected the IRN takeover (cash grab)...  Are others going to be interested in LST??  For IRN there is the added benefit of cancelling the 25% stake that LST has in IRN - but perhaps this becomes attractive to other mid-tier gold producers wanting to diversify - they get IRN stake plus Cracow potentially (news should be out this month on NCM sale process)...


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## 56gsa (26 March 2008)

crunching some numbers on this and what it means for LST shareholders ... any others out there ?  any comments on analysis below....

*At present:* 

LST mkt cap $292.23m  (191m shares x $1.53)	
IRN mkt cap $271.73m  (377.4m shares x $0.72)			
Combined mkt cap $563.96m 

*If IRN get 50% to 90% of LST* they pay 2.5 IRN shares for each LST
Say IRN get 70% of LST then the picture would be 

IRN shares (377.4m) 
+ 2.5 IRN per 70% of LST shares (334.25m)				
less 25% IRN cancelled (current LST holding -94.35m)
=>	617.3m shares, 
implied mkt cap of $476.29m (IRN mkt cap + 70% LST mkt cap above)	
implied share price of $0.77	


*If IRN get >90% (say 100%)* 
IRN shares   377.4m				
+ 2.7 IRN per 100% LST shares  515.7m				
less 25% IRN cancelled	-94.35m	
=>	798.8m shares, 
implied mkt cap of $563.96m  (IRN mkt cap + 100% LST mkt cap above)	
implied share price of $0.71

*So....
if you buy LST today * 1000@1.53	$1,530.00
in 70% scenario	  2500@0.77	$1,925.00
in 100% scenario	  2700@0.71	$1,918.89

article below suggests both LST and IRN are (grossly) undervalued, the combined group would have $350m in liquid assets (remember LST has $250m in cash+investments, IRN has $110m cash) and combined $1.4m in debt!!  not to mention up to 37.5% of the worlds 7th largest undeveloped copper resource...!!

downside...? for LST holders the takeover doesn't go thru - but I think we will see increase in LST before then and the takeover premium will ensure it remains closer to the NTA

thoughts?  



> Good on Indophil
> Barry FitzGerald
> March 24, 2008
> 
> ...


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## 56gsa (5 April 2008)

any thoughts on numbers above???

announcement today re NCM's bid induced valuation on Cracow... just means more (another $22m) in the kitty should IRN want to sell if they are successful.... 



> Lion Selection Limited (Lion) has received notification that Newcrest Mining Limited (Newcrest) has signed a conditional agreement to sell its 70% interest in the Cracow Gold Mine for A$200 million plus a cash royalty.
> • Lion owns 30% of Cracow. The bid implies a value for Lion’s 30% interest of A$86 million or approximately 12cps above the value attributed to Cracow in Lion’s Net Tangible Assets (NTA). Lion’s most recently released NTA (as at 29 February 2008) was $1.82 per share. If the value implied by the bid were used to value Cracow, the NTA would have been $1.94 per share.
> • Lion has a valuable pre‐emptive right to acquire Newcrest’s interest. Lion has 50 business days to make a decision once the pre‐emptive period starts. Lion is reviewing the terms and conditions of the purchase and sale agreement delivered by Newcrest today and will formulate its plans in respect of this high quality, low cost gold asset.


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## tommymac (8 April 2008)

One of the objectives of LST is to become a gold producer rather than an investment company.

I have my doubts that LST will accept a bid from IRN (or another) unless it is substantially more. With a rising Gold price the benefits of Cracow for LST may outweigh a takeover of $1.77, especially considering it could liquidate and have a value of $1.82 (as of 29 Feb as per the NTA)

56gsa, I haven't looked at your numbers, though have you considered if the current bid for Cracow of $200m is an accurate value? With LST owning 30% and a pre-emptive right, do you think this may have kept potential bidders away and hence a lower bid?

Just a thought.

Tommymac


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## 56gsa (6 May 2008)

tommymac said:


> 56gsa, I haven't looked at your numbers, though have you considered if the current bid for Cracow of $200m is an accurate value? With LST owning 30% and a pre-emptive right, do you think this may have kept potential bidders away and hence a lower bid?



heh tommymac - you could be right, LST's pre-emptive right could have scared others away meaning this is priced at bottom end.  difficult to know
i've been away a few weeks and notice the bidders statement has been released - LST saying don't sell to IRN...  interestingly LST also bought $100k of HAV on-market - not sure if this is somehow related to IRN?  

Not across my companies law but could LST sell its IRN holding to another party - this would then defeat the purpose of IRN's takeover???

Interesting just readin through the bidders statements see that Laxey Partners (LPL) appear to have 10% interest in LST...  appears to be a hedge fund - this is their speel...



> LPL conducts investments in companies which it feels are undervalued. Having researched these companies in great detail, LPL encourages and supports these companies to fulfill their potential and hence enhance shareholder value. LPL has a strong track record in this respect and its associates have substantial international expertise in focusing on the delivery of shareholder value.




Not sure how this will play out but I have a feeling there will be a few twists and turns - can't see IRN getting the 50% at their current offer and if other players see LST going cheap with all that cash and liquidity I think they will want a slice too...


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## tommymac (8 May 2008)

56gsa,
I tend to agree with you, there will be twist and turns.  Probably best just to sit back and wait.


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## 56gsa (8 May 2008)

tommymac said:


> 56gsa,
> I tend to agree with you, there will be twist and turns.  Probably best just to sit back and wait.




I'm definitely sitting on my holding in this TM - no rush here... U hold?

As my numbers above indicate there appears little downside with this if the takeover happens given the large liquid assets IRN is acquiring

Based on my numbers above, if you acquire LST now ($1.54 today), and IRN achieves 100% through takeover the break even point of your investment will be 57 cents based on the new number of shares for combined IRN_LST.  This implies a $455m mkt cap - but net liquid assets (cash + shares - liablities) will be $432m...  that would be valuing Tampakan at $23m!!!  Similar scenario for IRN acquiring 50%.

Downside you could say is takeover falling through but then you're stuck with LST at a 20% discount to its NTA - only bad if commodities fall

SO plenty of upside possibilities - new bidder, IRN increases bid (theres plenty of reasons for them to) etc etc


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## tommymac (14 May 2008)

56gsa said:


> I'm definitely sitting on my holding in this TM - no rush here... U hold?




I'm holding.  

LST just gone into trading halt until Friday. Have no option now but to wait and see.  Hopefully it will provide some answers.


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## tommymac (15 May 2008)

Wow! Two big announcements in one day.

LST agrees with Xstrata to sell holding in IRN
LST agrees to sell Cracow for $80m to BDR.

The first is obviously unexpected.  IRN now trading at $1.08, 8c above the offer price of $1.00 set by Xstrata.  Not unexpected however is that IRN rejects offer.  Good news for LST? IRN doesn't believe so with the comments in its announcement saying LST only way to make money is to sell investments. 

Personally I thought investment companies such as LST made money by buying and selling investments for a profit. Based on the price history of IRN , $1 looks like a reasonable price as it has struggled to stay about that in the past.  But they do make a good (but obvious) point that it could be a way to frustrate the attempt by IRN to takeover LST.

LST to sell Cracow.  I thought LST would try to buy Cracow.  It seems to be in line with its objective of becoming a Gold Miner. However, LST has requested to remain in a trading halt. Is there more news to come?


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## 56gsa (15 May 2008)

56gsa said:


> Not across my companies law but could LST sell its IRN holding to another party - this would then defeat the purpose of IRN's takeover???




TM ... the twist !!  Well I did have this as one of my scenarios but then didn't buy IRN directly so have missed out on its 40% gain...  only have the 15% gain on LST since IRN bid started but when trading commences again we should see LST up around the 1.70 mark?  NTA has gone up 20 cps based on potential proceeds of IRN and Cracow sales.

What's your thoughts on LST now they are all cashed up?  I expect a hefty dividend from LST which is what they have done in the past...  but you're right about the fact they wanted to become a miner and not just a LIC so they may take a controlling position in a company - maybe gold given their history...

Due to start trading tomorrow morn so announcement this afternoon I presume.


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## Squawkbox (15 May 2008)

As a holder of View Resources (VRE), I hope LST will want to use its cash to salvage its holding in VRE by baling them out - Bronzwing Gold Mine is up for grabs plus a 30% share in a profitable nickle mine.


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## 56gsa (15 May 2008)

Squawkbox said:


> As a holder of View Resources (VRE), I hope LST will want to use its cash to salvage its holding in VRE by baling them out - Bronzwing Gold Mine is up for grabs plus a 30% share in a profitable nickle mine.




more likely that one rather then the LAF debacle...  LST has also demonstrated a lot of support for HAV which now has 3 fairly well developed project s- they may want to overload 1 or 2 and concentrate on getting one operational...

don't think this will have much impact on share price though unless they score a real bargain


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## tommymac (15 May 2008)

56gsa said:


> What's your thoughts on LST now they are all cashed up?




56, A big dividend would be nice. 

A lot of scenarios to consider now and I guess we just need to wait.  But I too wish I had some holding in IRN. Assuming a good announcement tomorrow and we should see good gains in LST.


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## 56gsa (17 May 2008)

board meeting over the weekend - how much will the divvie be??  C'mon Lion, reward the faithful!

Total proceeds from IRN and Cracow (assuming $1 per IRN share and including shares on Cracow sale)
= $177m
=> 93cps

Profit on these transactions (based on costs of $23m for IRN and $56m Cracow)
= $97m
=> 51 cps

Now Xstata are getting a bargain paying $1 a share for IRN - I mean IRN have $100m in cash so really they're only paying $320m for 35% of one of the biggest copper/gold undeveloped projects in the world

For every 20 cents Xstrata raises its bid, LST's profit per share from these two deals goes up 10 cps

I think we may see two divvies:
1) based on Cracow sale which can go through soon - around 10cps
2) the bigger bonanza on IRN sale when it happens (maybe 30cps ++)

having staged divvies gives current LST holders something immediately and keeps them hanging on for the big one so highly UNlikely they'll sell into IRN takeover ...  (which - based on current IRN share price - in theory should see LST valued at $2.26++ but don't think that will happen)




> Indophil and Lion Selection sit out hostilities
> Email Print Normal font Large font AdvertisementBarry FitzGerald
> May 17, 2008
> 
> ...


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## 56gsa (17 May 2008)

actually much bigger than I was thinking - and I'd forgotten about the Albion stake - see below - nice position to be in giving away your millions...



> The Herald understands the strategy includes the planned sale of a 20.5 per cent stake in the Zambian nickel miner Albidon, held by Lion and two of its African funds, although no deal over the stake will be announced today. It is thought Zinifex and Xstrata have expressed interest in the Albidon stake.
> 
> The sale of Lion's stakes in Cracow, Indophil and Albidon could fill its coffers with more than $200 million in cash, in addition to the $75 million it had on hand on March 31.


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## 56gsa (19 May 2008)

No announcement first thing this morning - will try and check in between meetings today but happy if someone posts on this when the ann. comes out...


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## 56gsa (19 May 2008)

and there it is.... 

$1.35 possible return to shareholders - large chunk of which may be tax-free 

leaving an investment vehicle with NTA of $0.69 - which if trading at current typical discount would mean shares trade around $0.50

Currently $1.80 after trading commenced which suggest people don't see much upside or not confident this will go through

Hard to analyse but a tax-free div of $1.35 is comparable to about $1.90 fully taxed ??


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## tommymac (19 May 2008)

56gsa said:


> board meeting over the weekend - how much will the divvie be??  C'mon Lion, reward the faithful!




56, Spot on 

Gotta love these moments when all your word selecting shares seems to have paid off.  Obviously we've still got to wait to see it happen but a good moment none the less.


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## arco (20 December 2008)

Anyone have any thoughts on LST at the moment?

Or what other gold shares are worth looking at presently?

thanks - arco


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## Joe Blow (12 December 2009)

On 10/12/09, Lion Selection Group (LST) merged with Catalpa Resources (CAH) and is now trading as CAH.

Please see the CAH thread for future discussion of this company: https://www.aussiestockforums.com/forums/showthread.php?t=16955

This thread has now been closed.


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