FLX - Felix Resources

[porkpie324]

You have answered my bewilderment this week with FLX there was some strange quotes being placed and withdrawn, I took a long pos on FLX Thursday I was expecting a quick SP rise going on the buy quotes, then the quotes were withdrawn then placed back very confusing. I did consider closing but still regard FLX as a hold. porkpie

 

[noirua]

Yes, there is still a lot of interest in Felix Resources despite 67% of the companies shares being in the hands of 7 companies. Other holders are unclear as they hold via nominees and only have to announce themselves if they reach 5%.

I wonder how many of the top shareholders are willing to consider an offer for their holding? RMM ducked out quickly for $5.00 a share and I notice they may have needed cash for a deal in New Zealand.

 

[noirua]

Felix Resources use the RG Tanna Terminal at the Port of Gladstone to ship thermal and semi-soft coking coal from their Mines at Yarrabee and Minerva.

Here is a link about the "Port of Gladstone": http://www.networkaccess.qr.com.au/Images/portgladstone_tcm10-11869.pdf

Not to forget the terrible storm at Newcastle and Lower Hunter Valley, where Felix ship coal from their Ashton mines: http://www.metacafe.com/watch/665476/newcastle_storm_australia

 

[noirua]

As the Consmin plans widen and AMCI and Xstrata continue to face each other in interests in the Hunter Valley; Many may now wonder how and where the complexities that are Felix Resources fit into the pattern - @ What wondrous webs we weave.

Will the major shareholders of Felix meet to hash together an aggreement that will move all the assets of Felix Resources into "Consmin"?

 

[noirua]

Felix stock rose 26 cents to $5.36 as they confirmed a J/V agreement with the Japanese Company Sojitz for a 10% interest in the Moolarben Project.

Sojitz will pay Felix A$90 million and will contribute approximately A$30 million towards development costs.

Felix are in further talks with Asian Companies to sell a further 10% interest.

This sale confirms a developed valuation for the Moolarben project at A$900 million ( $4.80 a share ).

 

[noirua]

An interview with Mr Brian Flannery, MD, Felix Resources about the J/V with Kores and the Moolarben Project: http://www.brr.com.au/event/FLX/889/24862

( Unfortunately this interview is extremely poor when compared with BRR Radio's usual standards, a high pitch echo etc., )

 

[noirua]

An interview with Mr Brian Flannery, MD, Felix Resources about the J/V with Kores and the Moolarben Project: http://www.brr.com.au/event/FLX/889/24862

From the above interview it looks as if Felix Resources have decided to have three partners, holding a total of a 30% interest. This should bring in $270 million plus $90 million towards the $300 million development costs.

The Ashton Longwall Mine, completed early this year, appears to be going well and that despite the Newcastle Port problems.

The FLX year ended on 30th June 2007 and preliminary Annual Results should be out in three weeks time.

 

[porkpie324]

Appears to be profit taking with FLX, looks as if it crept in yesterday and carrying on today, can't see any significant support either at the mo.porkpie

 

[noirua]

Appears to be profit taking with FLX, looks as if it crept in yesterday and carrying on today, can't see any significant support either at the mo.porkpie

Hi porkpie, Yes, fair comment and probably right. Still, I hold a lot of stock and remain enthusiastic with Japanese, Chinese and Korean interest in Moolarben.

The recent interest by Kores in a purchase of 10% of Moolarben for $90 million, plus a share of development cost, puts an asset value of $900 million on the Moolarben Project. Other interested parties may treble the above sum.

Felix Resources have about 196 million shares in issue at $5.32, and this makes a market cap. of $1.01 billion.

Felix assets, taking account of debt, past losses used against profits and cash in the bank, value Felix at about $1.4 billion. That is without any allowance for perceived risk on the Moolarben Project. ( That risk is made up of financing, $300 million for development, unresolved court case with Xstrata/Mitsubishi in September and awaited go-ahead for open-cut and longwall mines.) )

 

[porkpie324]

Looks like some support coming in this morning, I have placed a small CFD order in at $5.27, had a nice trade last week picked up 5000 at 4.87 4.90 closed Mon/Tue at 5.36/ 5.31, don't open to many of FLX as thinly traded.porkpie

 

[noirua]

Felix have announced that the binding agreement with CRC to purchase 49% of the Yarrabee mine for A$68 million has fallen through. CRC failed to raise the funds.

Felix are in talks with two of its PCI customers who are interested in taking a stake in the mine.

 

[noirua]

Felix closed up 39 cents at $5.74, a high for the week, and up $1.16 from the low point about two weeks ago. The 4 year high stands at $5.90, this year and a years low of $1.68, all-time high was $13.50 in 2000 and low point, 38 cents in 2003.

The past few weeks have been particularly encouraging with the Kores agreement over Moolarben and interest from other countries from China, Japan and Asia. Hopes are that $90 million towards development costs will be paid by companies taking a thirty per cent interest and $270 million will be banked by Felix in extra purchase arrangements,

The Yarrabee mine is confirmed as having further interested parties and should raise in excess of $68 million for a 49% interest.

Comment by MD, Mr Brian Flannery, on further possible interests in India, (referring to 19.2% shareholder, AMCI's comments) as added to favourable comments on Felix Resources this week.

 

[noirua]

There are still some concerns over Felix Resources, jewel in the crown, The Moolarben Project. Financing problems seem all but secure now and concerns over the NSW Mining Wardens go-ahead delay, the Xstrata/Mitsubishi court matter and hold-up due to waiting for expansion of the Newcastle Port, appear to be the small stumbling blocks.

Moolarben will be worth $1.2 billion with all the above out of the way. ( Price worked out by Kores accepted bid of A$90 million and about a further $30 million towards development. ) Felix MD felt in his last broadcast that the $1.2 billion price would be raised substantially once the mine was operating.

The Yarrabee Mine is valued at about $140 million (taking the original offer of A$68 million for 49%), the other main asset of Minerva and Athena, is worth around $140 million to Felix who own a 51% interest ( taking the purchase by Kores of 15% for A$35 million ) and Ashton mines are seen to be worth around $120 million for Felix's 55% stake.

Felix stock is valued at $1.1 billion at $5.60 a share.

 

[noirua]

Felix Resources continued the advance and went through the $6.00 level for the first time, hitting $6.17, before closing at $5.99, a 4 year closing high.

Estimates of profits for the low cost thermal open-cut mine at Moolarben has captured the imagination. Eventual production will reach 6 mtpa with costs around Aus$30 per tonne and current thermal coal for 2008 looking like reaching Aus$72 per tonne ( US$62 per tonne ). The underground mine should follow with production at 4 mtpa. Anything can happen in the years ahead and risk factors have to be added in.

 

[Sean K]

Pretty good breakout. What's the story with the volume? Is this correct? Looks pretty minimal. Only a few shares on issue? Maybe just looks like that because of the Mar spike.

 

[noirua]

Pretty good breakout. What's the story with the volume? Is this correct? Looks pretty minimal. Only a few shares on issue? Maybe just looks like that because of the Mar spike.

Hi Kennas, There are 196 million shares in issue and about 140 million are very tightly held by 7 companies and several of the seven have links to each other. AMCI ( A large American private company ) bought a 19.2% stake from RMM for $5.00 a share about 6 months ago and this was seen as a blocking move as Xstrata were rumoured to be considering a bid.
Since then, Xstrata seem to have got the hump - in the view of many - and have taken Felix and NSW Mining Warden to the NSW Supreme court over access to Felix's Moolarben Project, cited as a move to hold up the project.

Some think that Xstrata may make a move on Felix at any time to stop the sell-off of percentage stakes in Moolarben. As three major shareholders have 50% of Felix Resources, excluding AMCI, this is seen as Xstrata's likely route.

 

[SevenFX]

I must be drawing dots n lines just for the sake of them, as I have no knowledge or interests in this stock.

But would like to have had, when it was back at $1.85

 

[noirua]

Felix Resources continued the advance and went through the $6.00 level for the first time, hitting $6.17, before closing at $5.99, a 4 year closing high.

Estimates of profits for the low cost thermal open-cut mine at Moolarben has captured the imagination. Eventual production will reach 6 mtpa with costs around Aus$30 per tonne and current thermal coal for 2008 looking like reaching Aus$72 per tonne ( US$62 per tonne ). The underground mine should follow with production at 4 mtpa. Anything can happen in the years ahead and risk factors have to be added in.

Eventual production at Moolarben open-cut mine should read 9 mtpa ( million tonnes per annum ) and not 6 mtpa.

Profits at 9mtpa would indicate forward profits EBIT $378 million p.a. for the open-cut mine. There would be reductions for Royalties to the NSW Government that may be around $18 - $22 million p.a. and Shipping/demurrage costs.

In an earlier post I said Kores had purchased a 10% stake in Moolarben. It was infact Soljitz of Japan.

 

[noirua]

Felix are suffering from very light trading, in the last week, as this tightly held stock causes concern. Near everyone appears to be waiting for Xstrata to move.

AMCI set a price of $5.00 as they purchased RMM's 19.2% stake some months back.

 

[porkpie324]

I opened a small pos yesrerday at 5.36, buying on the stochastic looking o/sold, has done me well of late, although had a bad one on the13/06 pos, but really coined it on the26/27 june positions(2) with stoch divergence, closed both 5.65 6 july.porkpie