FLX - Felix Resources

[haemitite]

Thanks for the continue updates noirua.

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.

 

[Halba]

Unbelievable increase in share price. Is it too late to get in?

 

[noirua]

Felix are now just shy of $6.00, up 10 cents to $5.90 this morning.

Xstrata MAY at some stage approach the 2nd and 3rd largest holders of Felix stock, they hold about a 34% interest in Felix Resources. Xstrata would then be forced to bid for FLX.

 

[noirua]

The following link is about two weeks old and shows responses by MD, Mr Brian Flannery, to the continuing demurrage problems out of the Newcastle Port: http://www.abc.net.au/lateline/content/2007/s1897178.htm


The above being the case we could see a start to mining at Moolarben as late as Autumn of 2009. This is against original estimates of early 2008.

No point mining coal with no third terminal in place.

 

[noirua]

WPG who bought the Felix Iron Ore tenements at Peculiar Knob and Hawks Nest for cash and royalties, reached a high of 72 cents today. WPG are expected to announce results of specific drilling at Hawks Nest where pods of very high grade iron ore had been reported. There is also hope of an upgrade in the high grade iron ore reserves at Peculiar Knob.

Felix holding in WPG is now worth $1.8 million and royalties from iron ore may bring in considerable sums from Early 2008.

 

[noirua]

Felix Resources on Boardroom Radio gives information to date: http://www.brr.com.au/partner/west/FLX/felix-resources-limited

Speculation ( NSW Mining Warden has yet to give a go ahead for the Moolarben Project and Xstrata have an unresolved dispute at the NSW Supreme Court over their Land within the Moolarben Project area) to date is that Xstrata and Felix may reach an agreement over the land that was purchased by Xstrata on which Mining rights were given to Felix Resources. Xstrata may offer to pay 20% of the mine development costs ( $60 - $65 million ) to obtain a 20% interest in Moolarben and give Felix exclusive rights to entry to the land. The latest analysts report values 20% of Moolarben at approx A$159 million ( including development costs ), and this factor, a difference of $94 - $99 million may be in discussion.
Xstrata may also be interested in raising the 20% to 49%.

 

[noirua]

Felix Resources bounced back to hit $5.87 at the close after bouncing off the $5.66 low for the day. Only a few cents off the 6.5 year closing high.

The Third Quarterly Results showed better sales of coal from the Ashton & Minerva coal mines.

 

[noirua]

Western Plains Resources (WPG) were placed in "trading halt" this morning pending an announcement. Felix have a share interest in WPG and royalties on iron ore production.

 

[noirua]

Xstrata's largest mines are; Bulga Complex - 8mtpa; Mount Owen - 5mtpa; and Oakley Creek 10mtpa.
Ownership of the Moolarben Project would make this its largest and lowest cost mine, situated next door to their Ulan Mine in the Hunter Valley.

AMCI taking a 19.25% stake in Felix has made a move more difficult. Despite the current court case, do not rule out behind the scenes moves that could quickly give Xstrata a controlling stake.

 

[noirua]

Felix trade at $5.64 this morning after a weaker trend this week. RIO announced that their subsiduary, Coal & Allied, would be laying off workers on cutbacks at the Newcastle Port to reduce the build up of ships during the rest of 2007. This will also affect others mining out of the Hunter Valley.

 

[terminator]

The newcastle port has advised miners to cut production by 18-20% because of congestion at the port. Coal & Allied has already done this. Will Felix resources follow suit and will this affect the share price?

 

[noirua]

The newcastle port has advised miners to cut production by 18-20% because of congestion at the port. Coal & Allied has already done this. Will Felix resources follow suit and will this affect the share price?

The share price is already down following annoucements about the cutbacks at Newcastle.

Felix has two mines at Yarrabee and Minerva in Queensland and only the NSW Mines at Ashton, open-cut and Longwall, will be affected. That said, yes, Felix will have to reduce production and that is unfortunate as the Longwall mine has only just started production on its completion.

Felix have not yet made any announcements.

 

[haemitite]

The share price is already down following annoucements about the cutbacks at Newcastle.

Felix has two mines at Yarrabee and Minerva in Queensland and only the NSW Mines at Ashton, open-cut and Longwall, will be affected. That said, yes, Felix will have to reduce production and that is unfortunate as the Longwall mine has only just started production on its completion.

Felix have not yet made any announcements.

This shouldn't affect FLX too much as its only in the production ramp-up phase - planned initial rates would not be high

All should be ok by 2009 when the new port is in operation

 

[noirua]

this shouldn't affect FLX too much as its only in the production ramp-up phase - planned initial rates would not be high

All should be ok by 2009 when the new port is in operation

Hi, I expect the negative phase to continue for a while as Felix may have to reverse their ramp up expectations at the Ashton Mines. The only alternative is to allow stocks to build up and that could be a problem.


On a lighter note, the Moolarben full valuation is around A$800 to A$900 million or $4.20 to $4.70 a share, without inclusion of a risk factor. Austock chose a 50% risk factor due to financing, Newcastle Port go-ahead and NSW approval for the mine. Others chose figures down to 25% risk factor.
It can be seen that providing Felix jump all the hurdles well then the risk factor will reduce.

Since the analysts reported some circumstances have changed. The NSW Government has given their approval of the phased expansion of the Newcastle Dock. Xstrata have taken legal action over their land that covers part of Moolarben.

 

[noirua]

Felix continued the trend downwards closing at A$5.33 in very light trading.

On a small but more cheery note, WPG in which Felix have a stake, moved up to 71 cents. Robert Duffin and Associates took a substantial stake in WPG. Felix stake is now worth $2 million and they have rights to royalties on production.

 

[noirua]

Felix are now well down on their high point at around $5.90. A combination of profit taking, Newcastle Port set-backs, Xstrata Legal wrangling over Moolarben that is holding up the Mine go-ahead.

On a smaller matter, once again, WPG have seen an announcement that CNN have also increased their substantial stake from 6.3% to 7.6%. Felix (through their 90% owned subsiduary S.A.S.E. ), if all goes to plan, can expect UP TO $8 million return, in a full year, from royalties on iron ore production ( albeit, that present reserves at Peculiar Knob will only last from 7 to 8 years production). A matter of conjecteur and of course, guess work, but, the Felix stake may well be worth UP TO $20 million with their stake holding in WPG also taken into account.

 

[noirua]

Felix Resources have been recovering gradually and trade at $5.25 this morning.

AMCI have completed their purchase of Felix shares from RMM and have converted the options. AMCI have obtained permission to hold more than 14.9% and completed transactions and now hold 19.2% of Felix Resources.

 

[noirua]

Felix trade at $5.45 this morning as we wait for the outcome of the following matters:
1). Payment by the European consortium of $68 million for 49% of the Yarrabee Mine.
2). Information from Felix on any likely cut-back at the Ashton Mines due to the statement given out by the Newcastle Dock.
3) Outcome of the court case; Xstrata, Felix Resources and NSW Mining Warden, concerning the land owned by Xstrata that covers 20% of the Moolarben Project.
4) Decision on the go-ahead for the Felix open-cast mine at Moolarben.

 

[noirua]

Felix trade at $5.45 this morning as we wait for the outcome of the following matters:
1). Payment by the European consortium of $68 million for 49% of the Yarrabee Mine.
2). Information from Felix on any likely cut-back at the Ashton Mines due to the statement given out by the Newcastle Dock.
3) Outcome of the court case; Xstrata, Felix Resources and NSW Mining Warden, concerning the land owned by Xstrata that covers 20% of the Moolarben Project.
4) Decision on the go-ahead for the Felix open-cast mine at Moolarben.

Felix finished trading at $5.34 (Recent high/low $5.90 - $4.98) after uncertainty wobbled the stock. Recovered about a third of losses and this coming week will prove whether this was a dead cat bounce or not.

The four uncertainties are listed above, if they are all cleared in favour of Felix then many may see the stock as cheap. The reverse if the unlikely comes about.

 

[noirua]

After OneSteels announcement on iron ore reserves near Whyalla, Felix will again be looking at the progress of WPG in evaluating their tenements at Peculiar Knob and Hawks Nest near Whyalla. Felix have a share interest and royalties in the area, and sold off the tenements, due to the likelyhood that WPG would get the mining of iron ore going ahead at speed.