CLE - Cyclone Metals

[prawn_86]

I think it shows bad management from CFE's point of view. They havent stated what the specific problem was and they have also said that the initial contract 'remains intact' until the one with delong is signed.

So what happens if delong want different terms? Then it could be drawn out even longer.

Also, CFE havnt said anything about enacting penalty clauses or any of that kind of thing, if proceedings dont go to plan.

As far as im concerned the timetable has gone out the window. If they delayed once, whats to stop them doing it again?

 

[lazyfish]

Off topic, does anyone know how much Mr. Ding got his 40M oppies for? Could he have paid more than the current market price for the 12M shares?

 

[MR.]

Off topic, does anyone know how much Mr. Ding got his 40M oppies for? Could he have paid more than the current market price for the 12M shares?

I have estimated his shares are costing him in round figures $0.50 each....................................

 

[Hot in Tropics]

Announcement by Delong Holdings that Ding has transferred his Initial Agreement to buy 70% to Delong - as expected. They have the available funds via the Convertible Bond. Also says that the final terms of the Agreement are be finalised - CFE said in its announcement that these were materially unchanged.

So, it is happening. Share price imo being held back until the deal is finalised and at least until the initial 30% is paid. And also probably until the second 55% instalment is paid.

I imagine the management of CFE (with all those listed and unlisted options of theirs) can hardly contain themselves - but, like us shareholders, patience is required.

Maybe Ding is buying time awaiting the Reserve to be boosted to higher levels, as 300Mt is not a huge, world class type deposit.

 

[Hot in Tropics]

Picked up this snippet on Mining News website:

CAPE Lambert Iron Ore is close to establishing a new flagship project after its cash injection from Delong Holdings, but it won't be in the Pilbara.

Anyone any idea what this is about ??

 

[Santoro]

What kind of interest would you earn on the 30% deposit in a month...wouldn't this too delay the rest of the installments by a month...so what kind of interest would you get in a month for 250 million?

 

[moneymajix]

This is the Mining News article.


CAPE Lambert Iron Ore is close to establishing a new flagship project after its cash injection from Delong Holdings, but it won't be in the Pilbara.

Cape Lambert has welcomed the Singapore steel manufacturer's investment after it converted 12 million unlisted options worth $AU4.6 million to take a 4.4% stake in the company.

Delong plans to convert its remaining 28 million options within days to take its share of the company to 13.25%, amounting to a $14.6 million cash injection.

Cape Lambert executive director Tony Sage said there were several options for how to use the extra cash, after the bankable feasibility study on the Cape Lambert project was complete.

"The first thing we are going to do is look at a new flagship project because we are only going to be a 30 percent stakeholder in this one (Cape Lambert)," he said.

"We've sent our technical team to see two or three (potential prospects), I won't say where at the moment because we are under confidentiality.

"If we don't get that, what we might do is a capital refund to shareholders but it looks highly likely at this stage that as soon as the funds come in we'll be in a position to make an offer."

The new project will still be iron ore but not located in Western Australia's Pilbara region, where Cape Lambert was, with Sage saying the company "doesn't think there are any more elephants up there."

"That's why Ian Burston came on as executive chairman, he's got a 15-man team now working for Cape Lambert and when the Chinese come in, they've got eight of their staff so we'll be able to free up a few of our existing staff to the new project," Sage said.

"There are some very good, interesting projects that Ian Burston has worked on personally in his many years of experience.

"He's come across a couple that happen to be not tied up with anyone at the moment. As soon as we get the funds confirmed, we'll get out there and take one of these other projects on.

"We've got $4 million now, we'll get another $10 million probably within the next 10 days and we'll get the $75 million at the end of the month."

Delong chairman Ding Liguo acquired the options through a private transaction in March, before transferring the options to his publicly-listed company.

Ding will also transfer his 70% interest in the Cape Lambert project to Delong after buying the interest privately in March for $240 million in cash.

Both parties agreed the first payment of this acquisition can be deferred until the end of September. Despite initial concerns, Sage said a delay of one month was more than offset by Delong taking a significant shareholding in the company.

Shares in Cape Lambert were down 1.5c to 51.5c in morning trade after closing down 2c yesterday.

 

[moneymajix]

http://www.theaustralian.news.com.au/story/0,25197,22369831-5005200,00.html


China's Delong slowly increases stake in Cape Lambert

September 06, 2007


SINGAPORE-LISTED Delong Holdings is building a 13.25 per cent stake in West Australian iron ore explorer Cape Lambert Iron Ore.

Delong, a Chinese steel-making group, has gathered an initial 4.4 per cent of Cape Lambert's shares after converting 12 million unlisted options.

That will increase to 13.25 per cent before the end of this month, when Delong converts another 28 million options.

The first conversion provided Cape Lambert with $4.6 million. The second conversion will take the total to $14.6 million.

Delong major shareholder and chairman Ding Liguo acquired the options privately in March, before transferring the options to Delong.

"By taking such a meaningful stake in the company, Delong has not only provided the company with a significant boost to existing cash reserves, but also gives a strong commitment of the role they would like to play in the company and its development moving forward," Cape Lambert said.

Mr Ding will also transfer to Delong a 70 per cent interest in the Cape Lambert iron ore project in the Pilbara region in Western Australia, which he agreed in March to buy for about $240 million in cash.

The decision has delayed settlement of the acquisition until the end of September.

Delong has a market value of about $1.2 billion.

Cape Lambert closed down 2c yesterday at 53c.

 

[MR.]

What kind of interest would you earn on the 30% deposit in a month...wouldn't this too delay the rest of the installments by a month...so what kind of interest would you get in a month for 250 million?

Yes, but what kind of interest would you make on 15 million over 3 1/2 years? (options)

Thanks Moneymajix for the articles..........

 

[tt1900]

It's rare when I checked out delong's website. The English version showed the Best Decade holding limited had 77.55% shareholding as at 7 March 2007. It is not the same as showed in their annual report 2006. In the annual report the Citibank Nominees Singapore Pty Ltd is the largest shareholder holding 30.89%, as at 7 March 2007. So I went to check the Chinese version of the website, but cannot to find the corresponding section of shareholding.

Then I start to wonder what this best decade company is, I ran Factiva database to check it out, only to find a few words:
Company Name
Best Decade Holdings Ltd
Location
British Virgin Islands
Ownership Type
Private
Industry
Iron/Steel/Ferroalloys

As I can't get much info on that best decade company, I begin to guess the following:

The Best decade is a state own company and partially owned by Mr Ding Liguo, the name have indicated the fast growing decade for the Chinese economy. The Chinese government are behind this offer. As I was born and educated in China, I know what resource means to our economic growth. Chinese government has more than a trillion US$ cash reserve, so its policy is encouraging local companies secure resources supply around the world, the Ministry of Finance will behind those offers. Just like the yankee secure the oil in middle east.

I found an article introducing Mr Ding Liguo comprehensively, more detailed than in delong's website, unfortunately, it is not written by English.
http://lunwen1.findfw.com/html/cfgs/_gtxz_ccdldg_1544.html

At last I think this stock is a cheap buy, as this deal will definitely go through. I'm in at 0.545, looking for the 0.75, finger crossed.

 

[moneymajix]

tt1900

That is an interesting post.

Being born and educated in China would give you a good idea of how things work there. As well as having Chinese language skills to read the various websites etc.

cheers

 

[MR.]

Interesting story and I'll admit it thats a little over my head.
If true the sale looks good but if not, it is my opinion, things will still be good.
I tend to believe the later.

- By Delong converting all the options it will basically tripple the amount lost on the extra 30 days of waiting. CFE I still believe has made a good deal.

- Delong has the money and little of it has been allocated in the recent past. So, Delong still has the money to buy the mine.

- How can Delong pay for the mine on 31/8 without informing its share holders or voting? However in the past few days they have now been informed. Same goes with the options.

- I believe payment for the rest of the options will need to be voted apon by Delong's share holders also at the same meeting "the purchase of the mine." TS's 10 days time for the options sounds about right to me perhaps after a meeting. Who owns the majority of Delong? so I'm sure both will be past.

- I would have to be the worst trader in the market. I bought on highs and sold on lows ??? I still have not made a cent with my average costs higher than the market stands at present. I wonder how I would have weathered without sharing my information?

- This story has never looked better!

 

[Hot in Tropics]

I agree the story has never looked better. But the share price is not going to perform until the $$$ are in the bank. Even receipt of the first 30% instalment is not likely to move the market, since if Delong do not stump up the second 55% instalment, then CFE are left owning 70% and they have a lot of debt finance to arrange in order to move forward towards production.

If that was to happen, would it be a good or bad thing to have Delong involved with the Project as 30% owners. I think over time this would be lead to real conflict, so Delong really has to think long and hard about their total commitment to the project before they pay the first 30% instalment.

And I personally think they have already decided to go ahead. Just that both sides are going through the various motions to extract final concessions pre signing.

 

[MR.]

I agree the story has never looked better. But the share price is not going to perform until the $$$ are in the bank.

"Show me the money" It has always been.

I believe that first payment will make all the difference. The second I have never been too concerned with. The conversion of the options l expect will make some share movement. But who knows. I didn't expect to see a high of 80 cents and a low of 32 cents recently.

 

[MR.]

http://www.industrysearch.com.au/News/Delong_lifts_its_stake_in_iron_ore_explorer_Cape_Lambert-27967

Two items posted from the above article...

1) He said Ding asked to have a representative on Cape Lambert's board, but would need to buy another 15-20 million shares on market to lift Delong's interest to 19.9 per cent.
"... we may see him, after this month, creeping up the register," Sage said.

2) The company has sent a technical team to Africa to assess three projects as there are not many large iron ore prospects remaining in WA, he said.
.......................

So my question is if Delong wanted to keep at least 19.9% of the shares on issue to stay on CFE's board, when would be the best time to buy shares to keep up with Options being excercised?

Here also is a second article:

http://www.news.com.au/heraldsun/story/0,21985,22369610-664,00.html

 

[Hot in Tropics]

134m options with exercise price of 28 cents, expiry October 2008 + another 50m option exercise price 33 cents, expiry October 2009. Terms of the deal (that i remember reading) stated that management control and mine operation would remain with CFE.

Ding is going to make the Management (and shareholders) of CFE rich assuming Delong coughs up the A$250m. Feasibility study due for completion April 2008, so cost + debt package/ syndicated bank finance would be worked out in Qtr 2/3. Ahead of the 134m options expiry in October 2008.

If you are convinced Ding/Delong will complete, Buy now and hold. Assuming all moves forward, the shares will surely trade above 60 cents between now and this time 2008. 10% return on investment with a free look at, what I think is potentially, considerable upside.

Also bear in mind, underlying equity markets will experience much greater volatility going forward than in recent times.

I dont see Ding buying a significant number of shares in CFE in remainder of 2007. More likely he will be offered some of the 134m or 50m options (similar to the 40m he is in process of exercising). Quid pro pro .... with a timeline of Qtr 3 2008 announcement.

 

[thooh]

Market is up but CFE is down. Look like no one is buying CFE at the moment. The Vol of CFE and CFEO is very low. Any news from Delong? Look like going to hold it until 31 of sep. Have no chance to get out before that time. I starting to get a bit worry since I hold a lot of CFE and CFEO.

 

[moneymajix]

Sp up - 55.5c

Ann.

UNTESTED MAGNETIC ANOMALIES IDENTIFIED AT CAPE LAMBERT IRON ORE
PROJECT.

KEY POINTS

● Several, large untested magnetic anomalies identified within 2kms of the existing
Cape Lambert resource;
● The anomalies have an equivalent magnetic response to that of the existing
resource;
● The anomalies, on drill testing, may increase the extent of magnetite mineralisation;
and
● Drill testing of the magnetic anomalies is planned for the December quarter.

 

[nberardis]

So one week to go,
Whats everybodies thoughts on the deal, is it going to go through?
What will the share price be, first week of october?
If the resource gets upgraded to 4bt+ what would be the share price then?

 

[nberardis]

My guess if all bodes well, 76 to 82c, assumming the deal goes through and doubling of the resource will push it close to the dollar