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FLX - Felix Resources

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The Legal Action taken by Xstrata, case due to be heard on 5th April 07, has a look about it as if they were beaten to the punch by AMCI., as they had their eyes on Felix's forthcoming meeting with the Mining Warden on 3rd April and their own efforts to block the Moolarbens Mine go-ahead.

Finding themselves in a catch 22 situation over the land they have certain rights to, that cover approximately 20% of the Moolarben mine, and AMCI coming up on the blind side and purchasing 19.2% of Felix, has left Xstrata in an uncertain situation which is of their own making.

Did Xstrata, seeing themselves as a big guy on the block, hope that Felix would cave in and let them have 20% of the project for next to nothing?
 
The big week for Felix Resources is now under way. If all goes well the stock at $5.06 is probably cheap. On the other hand, if all goes badly the opposite is the case.

The meeting with the Mining Warden this Tuesday is complicated by the Xstrata versus Felix court case on Thursday. Both concern the Moolarben Project.
 
Felix are recovering surprisingly strongly at $5.26, up 20 cents.

What ever the outcome of this weeks meetings the arrival of Xstrata on the scene is very interesting, especially after a report on Bloomberg about their views on the massive demand for commodities in China. My feeling is that there will be a happy end to all of this that will benefit Felix Resources as well as Xstrata.
 
What value should be put on Felix Resources with all that is going on. Heading forward at great speed and looking forward to the Moolarben mine coming onstream early next year and now we find ourselves, as shareholders, looking at all the extra fences being put up up.

The meeting with the Mining Warden, last Tuesday, looked straight forward both for the open-cut mine and the underground longwall mine. Now Xstrata, long known for all the Supreme Court wranglings over the years, are trying to prevent Felix from getting access to the Moolarben mine, by saying, they need the ground that covers 20% of the Moolarben Area for their own mine. Strange how they, Xstrata, failed to object to the Mining Warden, in due time, when they had the chance to do so.
What is Xstrata's real aim here?
The case brought before the NSW Supeme Court last Thursday continues this week.
 
What now, as Xstrata have gone off in a big sulk at being beaten to the draw by AMCI over the RMM 19.2% holding in Felix Resources.

Xstrata should, in theory, be happy with their purchases of Lion Ore and Gloucester Coal. The latter not quite so close to settlement. But are they?

The biggest holders of Felix Resources stock are Gaffwick Pty with 15.87%; Ilwella Pty with 15.61%; Fibora Pty with 7.71%; Greenworth Pty with 5.14%; Leopold Station with 5.14%; and Covelane at 2.2% - adding up to 51.67% and therefore control of Felix Resources. That would give Xstrata a near 52% chunk of Felix Resources. AMCI hold 19.2% of Felix.

The problems are the present court case, combined with a mining go-ahead at Moolarben for the open-cut and underground mines. If these problems were all out of the way then FLX may be worth as much as $7.50 a share. That is with the best analysts estimate and the 25% risk taken away.
 
Felix Resources are up 14 cents at $5.60 and from market depth are looking to go a bit higher. This is a 6.5 year high as they await important developments at Moolarben. Interesting news at Ausmelt on the ferrous side, Felix have a 21.5% stake in ADC, quite recently, has added further to confidence.
 
Moolarben is the next decision awaited with baited breath by Felix Resources Management and shareholders. This should give Felix an added push, if and when it is announced.

Xstrata are in the process of trying to stop Felix from gaining access to its area of land, that comprises approximately 20% of the area of the Moolarben Project. A preliminary Court hearing at the NSW Supreme Court took place on 5th April 2007.

Three major shareholders (excluding AMCI., who have 19.2% of Felix stock) hold over 50% of Felix Resources.

An interesting time lies ahead.
 
This is up over 250% now in less than 10 months

Its been a great ride but I'm starting to think about an exit point.
 
haemitite said:
This is up over 250% now in less than 10 months

Its been a great ride but I'm starting to think about an exit point.
Click to expand...

Hi haemitite, and Felix stock is up 1500% since its low point of 38 cents in 2003, but is well down from its high of $13.50 in 2001.

You have to make your own decision on this one.

Plus points are: Go ahead on Moolarben and future large mine at Athena. AMCI may take Felix into India to mine coking coal. Takeover bid is still on the cards. Newcastle Port third terminal will solve demurrage problems. ADC may float on the ASX giving Felix an added bonus. WPG may do outstandingly well with its iron ore reserves, Felix have royalties. The Phillipson, 5 billion tonne sub-bitumous coal reserves, may give Felix a much higher return than expected.

Downside: Thermal coal prices could weaken and strength of the Aussie dollar. Any success in the courts for Xstrata.
 
Felix have opened, up 12 cents at $5.72 and many wonder, not whether the $6.00 level will be breached, but, whether the analysts, Wilson HTM's, $7.25 figure, with 25% risk given at the time, is a target, if the Moolarben mine gets the go ahead and the Xstrata legal problem is solved or ditched by them. As the level of risk is reduced, the target gets closer, as Wilson HTM's $5.56, 12 month target, has already been beaten.

After this we can look for the next mine, it is Athena. This tenement is near the already producing mine at Minerva. The project has considerably more coal than Moolarben.
 
Felix trade at $5.82 this morning, up 11 cents, closing in on the $6.00 level. Felix await the NSW Mining Wardens decision on Moolarben and news of Felix's go ahead on Athena.
 
Thanks for the continue updates nuira.

I find it quite amusing that while most people have been banging on about uranium, copper and nickel the most commoditised and lowest margin sector, energy coal, has been a huge performer in the past 12 months

FLX up 250%, GCL up a respectable although not earth shattering 50%, and RSP have finally bolted in the last two weeks for a 100% gain as investors realise the significance of the GCL bid.

My holding in FLX came about from a plane trip three years ago where I talked to the previous CEO for a couple of hours. He told me how he'd managed to change the direction of the company from a grab bag of long shot projects to a meaningful direction in coal. Very convincing. As is the current share price.
 

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