CLE - Cyclone Metals

[AJ_]

I hold this one from a way back....

Well if it opens at the price of the AIM listed price of 32p, then that would be 77cents !!! (from last price of 46.5 cents)

Looking at some nice moves in the next few days I'm sure !!!

 

[AJ_]

And here is the news!

Quite big since the company was only capitalised at about $80mill.

LONDON (Dow Jones)--Chinese Investor to acquire 70% of Cape Lambert Iron Ore Project for US$192.5 million (approx AUD$250 million cash)

* Chinese investor to acquire a 70% stake in the Cape Lambert Iron Ore Project for AUD$250 million cash (values project at approx AUD$350 million)

* AUD$2 million deposit paid (AUD$750,000 non refundable)

* Conditional on proving a 300 million tonne indicated resource (expected Q2, 2007), shareholder and regulatory approvals

* CFE technical team to continue to manage the project development

Iron ore exploration and development company Cape Lambert Iron Ore Limited Monday announced it has signed a binding agreement with Best Decade Limited, a company associated with Liguo Ding, the Chairman of Singapore listed steel manufacturing and trading group Delong Holdings Limited, for the sale of 70% of the Cape Lambert Project, for AUD$250 million.

The Cape Lambert Project is located in the Pilbara region of Western Australia and is presently subject to various drilling programs, metallurgical, engineering, infrastructure, and environmental studies with the objective of preparing a Bankable Feasibility Study (BFS).

The 2007 drilling campaign, as previously planned, is scheduled to commence in mid-April.

Under the terms of the binding agreement, the purchaser has paid Cape Lambert a AUD $2 million deposit of which AUD $750,000 is non-refundable.

Best Decade Limited, owns 78% of Delong Holdings Ltd which is listed on the Singapore stock exchange and is headquartered in Beijing.

Its flagship business, Delong Steel, is located 430km southwest of Beijing in the industrial city of Xingtai (Hebei Province), near raw material sources and an extensive client base encircled by the Bohai Economic Zone. The group operates in China, Singapore, South Korea, Vietnam and Indonesia.

Cape Lambert Director Tony Sage said the agreement with Best Decade Limited would not only provide the company and its shareholders with a continued exposure to the project, but also allow it to fund its 30% share of the expected development expenditure of the project from cash reserves and therefore not dilute the capital of the company.

"The company will retain a significant equity holding in the asset and now have significant cash reserves that will allow us to evaluate and possibly acquire other projects. We are in the unique position of having sufficient cash reserves that will allow us to run the ruler over a number of seriously exciting projects."

This agreement is conditional on Cape Lambert providing the purchasers with an independent geological report confirming an indicated JORC compliant resource of 300 million tonnes.

The Directors expect the report to be completed in Q2, 2007.

The agreement is also subject to the company obtaining all necessary shareholder and regulatory approvals.

The purchaser will pay Cape Lambert 30% of the sale price (approx AUD $75 million) at settlement of the transaction with a further 55% (approx AUD $138 million) of the sale price being paid three months after that date.

The final installment, being 15% will be paid on completion of the BFS and commencement of construction.

In addition Sage said "that whilst the ownership structure of the Project would now change, at a management level all current work programs and studies would continue as if there had been no change in ownership.

This includes various metallurgical and engineering studies that are currently underway and the recommencement of drilling in mid-April".

 

[mmmmining]

New deals with Singaporeans. Imply CFE at 75c fully diluted.

Finally, I am glad Singaporeans joint the resource game. It becomes more and more interesting. I believe Chinese will feel the pinch. There is no more cheap resource assets any more! Want it, pay fair price.

 

[Brujo]

What's everyone's thoughts on why this has appeared to have fallen short of expectations?

Agree with the valuation of 75c per share, which doesn't allow for any further exploration upside, or future possibilities for the company, so todays share price action would appear slightly disappointing (if a 90% rise in the space of a week or so can be called disappointing!).

Is it the hurdles yet to be reached of JORC-resource thresh-holds, or a "show me the money" cynicism? I tend not to get caught up in hysteria, but this genuinely appears to have missed the mark somewhere....or what is it I've missed?

 

[nomore4s]

What's everyone's thoughts on why this has appeared to have fallen short of expectations?

Agree with the valuation of 75c per share, which doesn't allow for any further exploration upside, or future possibilities for the company, so todays share price action would appear slightly disappointing (if a 90% rise in the space of a week or so can be called disappointing!).

Is it the hurdles yet to be reached of JORC-resource thresh-holds, or a "show me the money" cynicism? I tend not to get caught up in hysteria, but this genuinely appears to have missed the mark somewhere....or what is it I've missed?

Agreed I thought it might have run a bit harder today as well.

 

[Stimpy]

Anyone who bought on Friday - and lots did - will have made a very quick, very tidy profit. Odds are that most have no idea about the actual value, they were just in for a quick buck because their mate told them to buy.

There are yet others who bought between April and June 06 who are selling at or below cost.

There's also the fact that the deal is conditional on the report which is a couple of months off, and only then will the big $'s change hands.

Seeing as the closing AIM price was about 30.75p IMHO there's no reason the price won't reach this level once things settle down.

 

[nomore4s]

Really getting sold down now. I think your right Stimpy, when things settle a bit and alot of the shorter term traders are out and the report is back, we should see a good increase.
IMHO some buyers getting a good deal today, considering the deal the company has released today. The fact Best Decade Limited has put down a $2mil deposit with a non-refundable amount is a good sign that both parties are pretty sure the deal is a goer.

 

[kiwiloe]

A pretty lame market reaction to the announcement, I thought.

Somebody buys 70% in a deal that values the shares at $1.40 (leaving out the options), and CFE is, as I write, selling for $0.51 cents.

I took the opportunity to top up, thank you everyone who rushed in to give away their shares (albeit probably making a tidy profit).

 

[chris1983]

A pretty lame market reaction to the announcement, I thought.

Somebody buys 70% in a deal that values the shares at $1.40 (leaving out the options), and CFE is, as I write, selling for $0.51 cents.

I took the opportunity to top up, thank you everyone who rushed in to give away their shares (albeit probably making a tidy profit).

Well I took a profit on my FOX resources and I'm onboard these now.

"Chinese Investor to acquire 70% of Cape Lambert Iron Ore Project for US$192.5 million (approx AUD$250 million cash)"

CFE - 247,576,062 (Market Cap (Undiluted): 126,263,792 )
CFEO - 136,511,800

Exercise Price (cents): 27.7
Expiry Date: 31/10/2008

The oppies will bring them an additonal 38 million.

Fully diluted market cap at 52 cents is just under 200 million.

They are getting 250 million in the deal and are retaining a 30% interest~! Add the money from the options..I see this as easy money. Can anyone else shed light to why the SP hasn't moved yet? Is the market just slow??

 

[nomore4s]

Yeah Chris I think it's pretty cheap at the moment considering the upside to come with this deal, good entry point imo, if I wasn't fully invested I would probably be looking to buy more at around 52c.

 

[chris1983]

Huge buy order just went through in the UK. The UK investors aren't slow like the aussies.

27-Mar-07
15:05:26 24.25 1,000,000 T £242.50k

Thats the equivalant to 59 Aussie cents. I think we may see some action tomorrow.

 

[mmmmining]

Well I took a profit on my FOX resources and I'm onboard these now.

"Chinese Investor to acquire 70% of Cape Lambert Iron Ore Project for US$192.5 million (approx AUD$250 million cash)"

CFE - 247,576,062 (Market Cap (Undiluted): 126,263,792 )
CFEO - 136,511,800

Exercise Price (cents): 27.7
Expiry Date: 31/10/2008

The oppies will bring them an additonal 38 million.

Fully diluted market cap at 52 cents is just under 200 million.

They are getting 250 million in the deal and are retaining a 30% interest~! Add the money from the options..I see this as easy money. Can anyone else shed light to why the SP hasn't moved yet? Is the market just slow??

I tell all my friends to buy PNN when Sinosteel pay good money (that time) for 60% of the SA uranium interest. It implied PNN at 75c+ for that deal only. But the share is traded at 55c-65c for quite a few weeks before it took off.

As far as my calculation, this deal worths 75c on fully diluted basis. But Just a few uncertainties around:

1. The deal might fall apart
My answer: I don't worry about this. The value of this company is huge simply because its location, so close to a port. You can have a project with very little transportation headache.

2. CFE might waste the money on some dodge gold mining purchasing, or so.
No answer yet: Then we need to exam the capability of the management. Anyone has good knowledge about it? Thanks.

 

[chris1983]

West Australian Article attached below. Im happy with the performance thus far. It can only get better IMO

 

[nomore4s]

Getting sold down a bit today

 

[BSD]

Any ideas on the sell-off ???

I am guessing anyone prepared to sell a $0.70 NTA share for $0.48 two days after an excellent announcement falls into the following category;

a. Couldnt afford to settle after buying on rumour
b. Couldnt afford to settle after buying on fact
c. Packed their dacks seeing an 'easy money idea' (see $0.70 NTA claim) fall by 8%
d. Doesnt trust management with a couple of hundred bars in the pocket not to buy some ratsh!t project
e. Combination of the above


Any other ideas?

I have been in this for some time now and have averaged-up; so am comfortably in-front but perplexed.

There was a major shareholder (of dubious background) selling down their stake before the announcement who still held a substantial stake. I wonder whether they are 'ongoing' in their selling?

All of the crossings today were in crumby lines however, which screams 'discount brokers' and hence my call RE: unable to settle.

Was interested in some other viewpoints.

 

[mmmmining]

Any ideas on the sell-off ???
Was interested in some other viewpoints.

It happened to PNN. A deal with Sinosteel valued the stock at 75c+ But the share are traded at 55-65c for quite a while. You know what I did? adding positions.

Nothing is wrong. Prime location, huge resources. Think it this way, it only worth 30c/share a couple of weeks ago. Either you did not want it, or you were happy to own it, why not now? Relax, or take a look at uranium stocks....

 

[BSD]

Either you did not want it, or you were happy to own it, why not now? Relax....

As I have mentioned mmmmining - I have been filling my boots pre and post the announcement.

I liked it before the deal and am very relaxed (AND profitable) now !!!

I am simply interested in understanding the mindset of the sellers

The T+3 crumbs can be very persuasive!

 

[Glenhaven]

I bought this week at 52c. I just cannot understand why the price is falling and to-day quite weak. It is down 6.7% in London at the moment.

There must be something I am missing.

 

[Zamac]

I bought this week at 52c. I just cannot understand why the price is falling and to-day quite weak. It is down 6.7% in London at the moment.

There must be something I am missing.

I dont think your missing anything. The sell down is crazy IMO. I have a nice holding and I'm just waiting for the indicated resource to come out confirming 300 million tonnes to ensure the deal goes through.

From the article I attached it says that it is expected to occur "within four to six weeks" for the indicated resource to come out. The company currently has an inferred resource of 2.5 billion tonnes. I'm willing to wait.

 

[nizar]

Amazing how every1 here seems astonished with the sell off.
Doesnt any1 remember that this went from 38c to 62c in a few days?

Dont you guys know that these spec stocks can come down as fast as they shot up?

Ever heard of PUMP and DUMP??